Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — INDUSTRY

British Steel Corporation

Mr. Kenneth Carlisle: asked the Secretary of State for Industry how many complaints his Department has received from private companies in regard to British Steel Corporation pricing.

The Under-Secretary of State for Industry (Mr. Michael Marshall): Many general complaints about BSC's pricing policy have been received in recent months. I have referred 18 separate and specific complaints on behalf of private firms to Mr. MacGregor under the procedure outlined in my right hon. Friend's statement of 24 February.

Mr. Carlisle: I thank my hon. Friend for that reply. Does he agree that the Government must continue their rigorous scrutiny of all such complaints in order to ensure that the massive subsidies that the Government are giving to the British Steel Corporation are not used unfairly to undercut the private sector steel companies

Mr. Marshall: The Government would never pretend that this mechanism can resolve all these difficult

problems. With overcapacity in the steel industry throughout the whole of Europe, problems will continue. But I take note of what my hon. Friend says.

Mr. Hooley: Is the Minister aware that the Prime Minister is forever wittering about industry becoming competitive, and that, as soon as the British Steel Corporation becomes competitive, we hear only moans and groans from the private sector? Is he aware that the real problems of the private sector are high interest charges, high fuel charges and the overvalued pound, which are a direct result of the Government's policy?

Mr. Marshall: The hon. Gentleman has answered his own question, because these factors apply to the whole of the steel industry in the United Kingdom. The basic problem is one of overcapacity throughout the whole of the Community, and it is important to try to tackle that problem at source.

Mr. Campbell-Savours: What assurances will the Under-Secretary give the House that BSC will not be required to raise its prices, as a result of these complaints, to such a level that it will lose its own traditional markets?

Mr. Marshall: There is no evidence to support that allegation.

Industrial Activity

Mr. Marlow: asked the Secretary of State for Industry when he expects an increase in industrial activity.

The Secretary of State for Industry (Sir Keith Joseph): I expect a recovery in industrial output to commence some time this year. It may already have begun. The latest available index of industrial production, for February, was 1 per cent. higher than in January, but one month's figures are not, of course, sufficient to establish a trend. A sustained increase in industrial activity can be achieved only through improved competitiveness, wage moderation, good management and co-operative working practices.

Mr. Marlow: If money could be saved by cuts in headquarters staff and senior civil servants within the


Ministry of Defence, thereby reducing interest rates and the taxes imposed upon industry, could industrial activity increase at an even faster rate?

Sir Keith Joseph: Conditions which favour lower interest rates are obviously favourable to industry.

Mr. Woolmer: Has the Secretary of State seen the report of the Charterhouse banking group, referred to in The Times today which says that output is expected to decline by 3 per cent. this year, and that an upturn will not come at least until next year, and that that depends on a change in Government policies? When will the Government institute a change in those policies and prevent unemployment from going well over 3 million, let alone over 2 million?

Sir Keith Joseph: The hon. Gentleman can take his choice among the various forecasts, but unemployment flows far more from trade unions pricing their members and others out of jobs than from anything that is within the Government's power.

Mr. Moate: Will my right hon. Friend agree that one of the things that could act as a major impediment to any upturn in industrial activity is high industrial energy costs? Will he accept that there is ample evidence that the hoped-for benefits from the Budget are not getting through to many major energy users in industry? Will he look at the question again?

Sir Keith Joseph: I am symphathetic to one aspect of my hon. Friend's question but I cannot agree that nothing else could be more prejudicial to industrial output. If the cure for high energy costs were to add to inflation or interest rates, that would be equally damaging to industry, if not more so.

Mr. Orme: Will the Secretary of State give us examples of high wages creating unemployment? Does he agree that Government policy is not working and that there is no possibility of a reduction in unemployment at the moment? What action do the Secretary of State and the Government propose to take?

Sir Keith Joseph: Unemployment, which has risen so fast in this country, largely reflects the uncompetitiveness accumulated over recent years, particularly due to wage pressure unaccompanied by the higher productivity which our competitors have established.

Northern Region National Enterprise Board

Mr. Dormand: asked the Secretary of State for Industry if he will increase the resources available to the Northern Region National Enterprise Board.

The Minister of State, Department of Industry (Mr. Norman Tebbit): I have no intention to do so since I am satisfied that the National Enterprise Board has sufficient funds to fulfil its regional role.

Mr. Dormand: Is the hon. Gentleman aware that the Opposition welcome the continuing existence of the Northern NEB, but that we are suspicious that its lack of resources is yet another example of the slow strangulation by the Government of the Northern region? Does the hon. Gentleman agree that the Northern board is making only a minor contribution towards solving the North's problems? Therefore, will he not only greatly increase the resources, but introduce new, flexible guidelines so that the pressing and increasing needs of the region can be met?

Mr. Tebbit: No, Sir. I think that the guidelines are flexible enough to take care of any viable projects. If the hon. Gentleman knows of any viable, profitable projects which are held up for lack of funds, I should be grateful if he would let me know.

Mr. Richard Page: In view of the proposed merger of the NRDC and the NEB and the effect that that will have on the Northern region, when may we have a statement on the matter?

Mr. Tebbit: My right hon. Friend answered a question on this matter recently, so there is no requirement for a further statement in that respect. The two organisations are coming close together under the common chairmanship of Sir Freddie Wood, and we have recently appointed Mr. Lawrence Tindale to both boards.

Mr. David Watkins: Does the Minister of State regard the Northern NEB as a necessary instrument of regional policy, or will it be allowed to wither away, as has practically all industry in the region, under the Government's policies?

Mr. Tebbit: There is a role for the NEB in the Northern region, but the principal need is for profitable projects. It cannot be used as a means of subsidising unprofitable ventures. There is not enough money in creation for that and not enough wealth is being created elsewhere in the community to afford that kind of thing.

Sir William Elliott: Is my hon. Friend aware that, despite Opposition Members talking of industry withering away in the Northern region, in the past 12 months three times as many factories have opened on our trading estates as have closed? Although we still have a long way to go and many of the factories are small, employment is in balance. We have gained as many places on our trading estates as we have lost. Indeed, there are many inquiries for small factories on our trading estates through the English Industrial Estates Corporation.

Mr. Tebbit: My hon. Friend is correct. If hon. Members wish further details, they should read the Official Report of our last debate on the Northern region when I made plain the excellent work that notably the English Industrial Estates Corporation was doing in this respect and how well many small firms were responding.

BL Ltd.

Mr. Beaumont-Dark: asked the Secretary of State for Industry if he will make a statement on the progress made by BL in increasing market share of various models.

Mr. Heddle: asked the Secretary of State for Industry if he plans to have any discussions with the chairman of BL to discuss the progress of the BL model range.

Mr. Tebbit: BL's market performance this year has been encouraging. Over the first four months of the year BL's domestic market share exceeded 20 per cent.—a notable improvement over the same period last year. Metro sales have exceeded expectation, taking about 9 per cent. of the United Kingdom market this year up to end-April. The development and launch of further new models to build on this improved performance is progressing well. Progress with these and other models, as well as BL's general performance, is covered in the discussions I hold from time to time with Sir Michael Edwardes.

Mr. Beaumont-Dark: I welcome the Minister's reply on how BL is helping itself. However, does he agree that the problems of the British motor car industry—which are the same as in Europe—are so intense that if we allow the Japanese and the East Europeans to go on penetrating the market as they are now, within 10 years we may have precious little motor car industry left? Will he follow the American example and get for Britain what the Americans have got for the American car industry?

Mr. Tebbit: I hope that we shall not get for the British market what the Americans have got for theirs, because they have about 25 per cent. penetration by Japanese motor cars. By agreement between ourselves and the Japanese industry, we are restricting their penetration to 10 per cent. to 12 per cent. So long as that agreement holds—I hope that it will—it is up to the British industry to reorganise itself to meet and eliminate that competition.

Mr. Heddle: Does my hon. Friend agree that, as long as the unhappy events of last week are allowed to continue, BL is likely to become a one-car company? Does he further agree that BL should do all that it can between now and 1984 to expand its range so that it can compete fairly and equally with competition from abroad and that, in so doing, it should incorporate as many common components as possible and so breathe some fresh air into the components industry on which the West Midlands depend?

Mr. Tebbit: I think that I largely agree with my hon. Friend. Because we believe that BL has a chance to develop its new models, we have not only authorised the LC10 series to go ahead, but have recently authorised BL to go ahead with the new Jaguar XJ40 series, which I hope will be on the market in about 1984.

Mr. Les Huckfield: Does the Minister of State accept that there is great fear throughout the West Midlands that the Mini Metro will soon be the only substantial model that BL will be making? Does he further accept that what is affecting BL at the larger end of its range—particularly Rover and Jaguar—is the Government's policy, particularly the strength of the pound, and the recent increase of 20p a gallon on petrol?

Mr. Tebbit: The loss of output due to the strike a week ago has done far more damage to BL than 20p a gallon on petrol.

Mr. Alan Clark: Does my hon. Friend accept that, in relation to the enormous sums of public money which have been devoted to BL, these figures are not at all impressive? Were normal accounting procedures to be applied to the corporation, would not the Mini Metro have to sell for about £6,000 to give the taxpayer a reasonable return? Does he further accept that there is a limit to the extent to which many Conservative Members can tolerate the continuing subsidy of a giant and incompetently managed job creation scheme while jobs in the defence industries—notably in shipbuilding and weapons procurement—are threatened by insatiable demands?

Mr. Tebbit: I am sure that all workers in British Shipbuilders will be glad to hear the words uttered by my hon. Friend in his stalwart defence of that company's competitiveness but my hon. Friend should recollect that Sir Michael Edwardes has given undertakings on the action that he would take if it became clear that the plan

could not be carried through to success. Indeed, his actions last week underlined his determination to ensure that the plan does succeed, even if it requires tough decisions.

European Community (Steel Negotiations)

Mr. Richard Shepherd: asked the Secretary of State for Industry what progress has been made in the steel negotiations in the European Economic Community.

Mr. Tebbit: Discussions on State aids to the steel industry are proceeding under the aegis of the Council of Ministers and the United Kingdom is pressing for a draft decision. At its next meeting on steel the council is expected to consider preliminary proposals by the Commission. Discussions on voluntary restraint after 30 June are continuing among Community steel producers who are being assisted by the European Commission. Progress has been made but many issues have still to be resolved.

Mr. Shepherd: Although I am grateful to my hon. Friend for that reply, is there any possibility of European agreement on steel prices by the end of, say, the second quarter?

Mr. Tebbit: I hope so, although it will be difficult to achieve. Things have not been made any easier because, as a result of the French presidential elections, the French have felt unable to take part in the meetings scheduled for 12 May and 25 May. However, I hope that we shall have a meeting on 1 or 2 June at which some decisions will be reached.

Mr. Hooley: Will the Minister give an assurance that the special steel sector will not be further undermined by imports from EEC Countries? Those imports have increased from about 10 per cent. to 50 per cent. of the British market.

Mr. Tebbit: That will largely depend on the degree to which workers, managers and proprietors of such companies meet the competition.

Sir Anthony Meyer: Will my hon. Friend agree that production restraints can at best be only a short-term palliative? Does not he further agree that if such restraints are to be effective they must be enforced all round, and include—unfortunately—some British Steel products?

Mr. Tebbit: My hon. Friend is right to say that production restraints are an unhappy short-term measure. Long-term measures must include the ending of subsidies to steel making across Europe. Britain has taken a substantial slice of the capacity cutbacks that have been made. I should be reluctant for Britain to cut back further while others in Europe continue to subsidise and extend their production.

Dr. John Cunningham: Although my hon. Friends and I are reassured by the Minister's last response, will not he agree that, in the context of the restructuring of European steel, it is clearly unacceptable for us to continue with closures without any agreement with our European partners? Will the hon. Gentleman make it clear, particularly to some of his hon. Friends, that he is committed to continuing the agreement on quotas that is due to expire on 30 June?

Mr. Tebbit: I am committed to seeking an agreement in Europe that will continue, or replace with something


better, the present agreement on quotas and prices. It does not matter how that objective is achieved, but we certainly share it. As in the case of other businesses, it is always possible for steel companies to close themselves by raising their prices or losses to a level that their customers or financiers cannot accept.

West Yorkshire (Government Assistance)

Mr. Woolmer: asked the Secretary of State for Industry if he has yet concluded his consideration of the need of the textile area of West Yorkshire for Government assistance.

The Minister for Industry and Information Technology (Mr. Kenneth Baker): I hope to do so shortly.

Mr. Woolmer: In coming to that decision, will the Minister bear it in mind that an enormous number of jobs have been lost in the textile areas of West Yorkshire? For example, in the Batley and Dewsbury area, unemployment has risen under this Government by 173 per cent. Is the Minister aware that male unemployment in Batley amounts to 22·5 per cent? When is "shortly"? When does the Minister intend to take policy decisions that will offer hope, instead of gloom, to the employers, workers and communities of the textile areas?

Mr. Baker: I am aware of the problems in the wool textile industry. As the hon. Gentleman knows, I recently visited the area for a few days. The factors that he mentioned will be taken into account. The hon. Gentleman and the hon. Member for Dewsbury (Mr. Ginsburg) saw my right hon. Friend the Secretary of State about a month ago. All these factors will be taken into account.

Mr. Waller: Although there is much support for his policy of being more selective in the use of regional assistance, is not my hon. Friend aware that there is concern that our policy may disqualify some of those areas from assistance from the EEC? Will he take that into account when he makes any future decisions?

Mr. Baker: I am aware of that. A total exclusion is not involved, as some funds under the social fund may be available. Many other factors are involved. One of the difficulties is determining the boundaries of regional policy and the relative claims of different areas. It is a difficult problem for any Government to deal with.

Dr. Summerskill: Will the hon. Gentleman bear it in mind that the West Yorkshire textile industry has just been through the worst year in its history, and that the EEC countries of France, Holland and Belgium provide massive aid schemes for their textile industries? Could Britain do the same for its textile industry, given that we provide support for the steel, car and fishing industries?

Mr. Baker: I am aware of the hon. Lady's interest in this subject. Indeed, I read the report of the Adjournment debate that she recently initiated. None of the schemes mooted by those three Governments has been implemented. We are considering them carefully. Since we have been in power about 403 projects of assistance to the wool textile industry—amounting to about £11·4 million—have been approved by the Government.

Loan Guarantee Scheme

Mr. Greenway: asked the Secretary of State for Industry when he will be able to announce the timing of the launch of the proposed loan guarantee scheme.

Mr. Nicholas Baker: asked the Secretary of State for Industry if he will make a statement on the application of the loan guarantee scheme to industry and commerce.

Mr. Myles: asked the Secretary of State for Industry what role his Department will play in the operation of the proposed loan guarantee scheme.

The Under-Secretary of State for Industry (Mr. John MacGregor): My right hon. and learned Friend the Chancellor of the Exchequer has announced that the loan guarantee scheme will operate from 1 June. Full details of the scheme's coverage will be given in the supporting literature, which will be available on 1 June. The Department will administer the scheme and will be monitoring its results, but the primary appraisal of loans to be guaranteed will be undertaken by the banks.

Mr. Greenway: May I welcome that reply, not only on behalf of hon. Members but on behalf of small and other businesses? What will the rate of interest be under the loan guarantee scheme?

Mr. MacGregor: I am grateful for that welcome and am aware of outside interest, particularly among small firms. That is why I have been anxious to get the scheme into operation as soon as possible. The rate of interest will be for the banks to decide, but it will be at their marginal rate of interest, or thereabouts. It must be borne in mind that this is additional lending and probably carries a higher risk than any lending that the banks undertake at present. It is not the intention that existing lending should be siphoned into the scheme.

Mr. Baker: Will my hon. Friend press ahead with publication of the details of the scheme, because the delays are causing concern in business circles? Will my hon. Friend make it clear what the security is to be for the loans? Furthermore, will he seek to widen the class of business and industry to which the scheme will apply?

Mr. MacGregor: I am aware of concern about the delay, but substantial legal documentation has had to be completed between the banks and my Department. In addition, many loan application forms—about 14,000 branches are involved—have had to be published. However, I can assure my hon. Friend that everything possible has been done to press ahead with the scheme. It is axiomatic that personal security is unlikely to be required. That is the whole point of the guarantee. As term loans on fixed assets will be involved, business securities will be required under the scheme in many cases. I have made it plain that a wide range of businesses will be involved, including the manufacturing and commercial sectors and a great deal of the service sector. I am anxious that that should be so.

Mr. Myles: I welcome the scheme's announcement. How will it operate in Scotland?

Mr. MacGregor: It will operate in Scotland with the Scottish banks. As my hon. Friend knows, the legal system in Scotland is different from that in England and we still have to complete some of the different legal arrangements. However, I hope that the scheme will operate shortly after 1 June.

Mr. John Garrett: Does the Minister agree that general business opinion is that the loan guarantee scheme is too small, is potentially to bureaucratic, and calls for too high a premium for it to be anything but a cosmetic exercise? Is it not true that the interest in a small business scheme has been stoked up by the Government as a smokescreen to distract attention from the universal collapse of big business?

Mr. MacGregor: We have made it plain that this is a pilot scheme. It is designed to test the view that there is a gap in the market in this area, particularly where small businesses do not have a track record or are unwilling or unable to give securities. I shall monitor the scheme and if it is felt that it is too small, we shall give that consideration. However, £50 million is a fairly large initial tranche for such a scheme. I reject the charge that the scheme will be too bureaucratic. A handful of people in my Department will handle the scheme. I was extremely anxious to ensure that bureaucracy should be as limited as possible.
The banks will reflect in their rate of interest the premium that the Department is charging. They will also reflect the fact that they are getting a guarantee as a result. Therefore, I do not believe that the interest rate will be too high as a result of the premium. It is important for those interested in the scheme to be prepared to shop around the banks because I am anxious that competition shall apply.

Mr. Grylls: Will my hon. Friend open the scheme to the foreign banks, many of which have branches all over the country, to engender more competition and perhaps push the interest rates down? Will he also reconsider the maximum sum of £75,000, which is low for a medium-sized company?

Mr. MacGregor: It is a pilot scheme. We are anxious to direct it to small firms in particular. That is why the figure of £75,000 was fixed. I agree about the need for competition. That will, I hope, have its effect on interest rates. A number of banks other than the clearers have already applied. I am considering their applications urgently. Not only the foreign banks, but a number of British banks other than the clearers might be interested in the scheme. I hope that they will apply.

Small Firms (Borrowing Facilities)

Mr. John Browne: asked the Secretary of State for Industry what action he is taking to extend facilities for borrowing by small firms from such organisations as the European Investment Bank and the European Coal and Steel Community.

Mr. Trippier: asked the Secretary of State for Industry if he will take steps to extend facilities for small organisations to borrow from the European Investment Bank and the European Coal and Steel Community.

Mr. MacGregor: On 30 April I signed a £5 million exchange risk agreement with Midland Bank Industrial Equity Holdings Ltd. which will assist it to make European Investment Bank foreign currency loans available to small firms in the assisted areas of England and Wales. This agreement complements the agreement that I signed recently with Finance for Industry Ltd. and the Government's own EIB agency scheme—both of which cover loans to small firms throughout the assisted areas and in Northern Ireland.

Mr. Browne: I thank my hon. Friend for that reply. What further steps does he envisage taking to encourage United Kingdom banks to extend still further their present help to small businesses?

Mr. MacGregor: One bank has so far applied for the EIB loan. The EIB and the European Coal and Steel Community are discussing similar global loans with a number of other organisations, which might include banks. Applications for exchange risk cover will be considered. Already in the last year or so the banks have introduced a much wider range of financial facilities for small firms. The loan guarantee scheme will be another major addition.

Mr. Trippier: I thank my hon. Friend for his initial reply. Will he seriously consider ways of retaining the facility of loans from the European Investment Bank and extending it to assisted areas, such as my constituency, which is an intermediate area, when it loses that status on 1 August 1982?

Mr. MacGregor: The problem is that the EIB loan finance is for the development of the less-developed regions and assisted areas. The ECSC finance is for coal and steel closure areas. The change in area status in my hon. Friend's constituency will take place in August 1982. The loans are for seven to eight years. Therefore, my hon. Friend's constituents have a year in which to take advantage of the scheme. The loan will last for seven or eight years thereafter.

Mr. Campbell-Savours: Is not the threshold on EIB loans about £100,000? Is not the reason why some companies have not been able to take advantage of the loans the fact that they do not want that level of facility?

Mr. MacGregor: I am grateful to the hon. Gentleman, because he enables me to clear up a misunderstanding. The schemes that I have announced are specifically for small firms. We have arranged them so that there will be the minimum paperwork and so that firms can take advantage of them quickly. The minimum threshold is £15,000, which is the EIB's own minimum. It therefore applies to a wide range of small firms.

Mr. John Page: I welcome my hon. Friend's reply. Is he satisfied with the co-ordination, especially across different Departments, of the whole Government package to help small businesses?

Mr. MacGregor: The Government have undertaken a wide range of measures across the Departments specifically to assist small firms. That shows our determination to help the small business sector, and it shows also that co-ordination is good.

West Cumbria (Industrial Economy)

Mr. Campbell-Savours: asked the Secretary of State for Industry if he will seek to meet leaders of West Cumbrian industry to discuss the industrial economy of the county.

Mr. Tebbit: I have no doubt that if leaders of West Cumbrian industry see merit in discussing the industrial economy of the county with me they will ask to do so. My noble Friend the then Minister of State did of course meet representatives of industry in Cumbria when he visited the county late last year.

Mr. Campbell-Savours: Does the Minister accept that the announcement by the British Steel Corporation last week that it is to make 907 of my constituents redundant is catastrophic for Workington? Is he aware that it will lead to an unemployment level of 18, 19 or 20 per cent. later this year? Will he review the assisted area status decision that he took one and a half years ago, when he reduced the area from being a special develoment area to a development area? We want our status back.

Mr. Tebbit: Of course I deeply regret that the British Steel Corporation has found it necessary to announce further redundancies in the hon. Gentleman's constituency. There is no pleasure in that for any of us. Despite that, in view of the present position in his constituency and the local travel-to-work area relative to those around it, I am not yet convinced that it would be right to reverse the decision taken last year.

Mr. Wilkinson: When considering what response to make to representations on the level of industrial activity in Cumbria, will my hon. Friend have discussions with Ministers in the Department of Defence, since defence-related industries play an important part in sustaining employment and industrial activity in Cumbria, as in many other industrial regions?

Mr. Tebbit: Yes, we keep such considerations in mind. I am sure that my hon. Friend equally bears in mind the fact that the greatest part of the output of defence-related industries is paid for by the taxpayer and does not have a market that is voluntarily supported by the customers.

Mr. Orme: Does the Minister agree that the recent redundancies in that small industrial community will have a devastating effect on areas such as Maryport and Distington, where male unemployment is reaching 20 per cent.? Will the Minister take special action to deal with that?

Mr. Tebbit: It is always possible to define particular small areas with enormously high peaks of unemployment. I have to look at the whole of the travel-to-work area relative to others and relative to unemployment in the United Kingdom as a whole. It is essential that there is a clear incentive for industry to go to the worst areas. Unless help is concentrated it becomes totally ineffectual.

British Steel Corporation

Mr. Fry: asked the Secretary of State for Industry if he will take steps to ensure that money provided by Her Majesty's Government to British Steel is earmarked only for purposes which have been announced to Parliament.

Mr. Tebbit: The Government already make clear to Parliament the general purposes for which funds are being provided to the corporation.

Mr. Fry: Is my hon. Friend aware that I have in my possession a copy of a document produced by the British Steel Corporation in 1979 which effects to show that the corporation was prepared to clear the extra bank loan of Corby Town football club merely to avoid the directors of that club having to face embarrassing charges? Is he further aware that one of the directors is the new Labour leader of Northamptonshire county council? Will he take steps to ensure that no such event can happen again?

Mr. Tebbit: I do not believe that in recent times the British Steel Corporation has given any such assistance. Certainly that is not its policy today. Like Stewarts and Lloyds, the town's main employer before the steelworks closed, the BSC has felt some social responsibility in the past to support the club. Some limited financial support was given then. None has been given for two years, and none is in prospect. I am sure that it would be wrong if it were.

Mr. Moate: Does my hon. Friend agree that British Steel Corporation money—that is, taxpayers' money—is going into the so-called Phoenix companies? Why should the taxpayers—the shareholders of the BSC—not know what cash resources will be available to the new companies?

Mr. Tebbit: My hon. Friend repeats a question that he put to me during the debate on Thursday evening. I gave him the reply then that these matters will become clearly known as the companies publish their accounts. No doubt my hon. Friend will seek to put the question to me again this evening, because he is a persistent man.

Mr. Chapman: asked the Secretary of State for Industry if he will make a statement on recent productivity trends and capital investment in the British Steel Corporation.

Mr. Tebbit: I understand that productivity in the corporation has been improving in recent months as a result of the continuing programme of manpower reduction coupled with a recovery in steel output from the low levels in the last quarter of 1980. As regards capital investment, the corporation has announced that this will be limited to the completion of schemes in progress and essential new items, at a cost of about £200 million in 1981–82.

Mr. Chapman: I welcome the increase in output per man in this country in recent months. How does steelmaking output in the United Kingdom compare with that in other European countries? On capital investment, does my hon. Friend agree that the higher the output the more public subsidy will be available for installing modern plant, which will lead to more output, higher wages and the need for less public subsidy to cover increased operational losses?

Mr. Tebbit: The statistics of individual steelworks show that the best of our works now match some of the best of Europe. I know that it is the ambition of many steel workers in the corporation, and also in the private sector, to match even what is achieved by Japan. I welcome the determination and the new attitude that have sprung up since the disastrous steel strike last year. I hope that before long new capital investment can be accomplished out of the profits of the industry and without any public subsidy. There is no point in requiring taxpayers indefinitely to subsidise loss-making activities.

Mr. Hardy: I am grateful to the Minister for his comments. Will he accept that the attitude of determination to achieve success in British Steel was established long before the steel strike, as he will ascertain if he examines the Rotherham position? Will he accept also that the position of British Steel and of the private sector would be a great deal better if the European Community did not expect a larger contraction in the


United Kingdom than in any other steel-producing member State? Is he not aware that article 58 is unhelpful to the success of British Steel?

Mr. Tebbit: I must differ from the hon. Gentleman in almost every aspect of what he says. If the British Steel Corporation had been as competitive and as eager to succeed in the past as I believe most of its members now are we would not be in the process of passing legislation to write off £3·5 billion of debt.

Mr. Michael Brown: Will my hon. Friend take the opportunity, following his recent visit to my constituency, to congratulate both the unions and management on the strides that they have made in achieving some of the best productivity figures in the world at the Scunthorpe plant? Will he note the concern of many steel workers and managers at Scunthorpe that, in spite of all the investment made at the plant, there is some doubt, at a time of need for continuous casting, about the extent of capital funds that will be available for the project?

Mr. Tebbit: When I visited my hon. Friend's constituency and the steelworks there I was profoundly impressed with the attitude of all those employed at the works. I make no disinction between managers, who are workers, or chaps on the shop floor, who are workers. New capital investment must depend upon the financial results of the corporation and the prospects for getting a better market in steel in the European Community.

Dr. John Cunningham: Will the Minister of State reconsider his reply to my hon. Friend the Member for Rother Valley (Mr. Hardy)? Have not many of our best plants, in both the public and private sectors, in towns like Rotherham and cities like Sheffield, been undermined, regardless of their productivity or their record, because of the flood into the British market of subsidised steel products, particularly from the Federal Republic of Germany? Is there not a need for safeguards for even the best and most efficient of our steelworks? Does the hon. Gentleman agree that a commitment should be given to make sure that the present regime is continued until the market is sorted out?

Mr. Tebbit: I hope that the hon. Gentleman will not make it difficult for me to agree with him. If he had referred to subsidised imports flooding in from other European countries I should have found it easy to agree. The hon. Gentleman must understand that British taxpayers would be happy if they subsidised our steel industry only to the extent that German taxpayers subsidise theirs. The hon. Gentleman has picked on the wrong victim. The cause of the great flood into this country was not even the subsidy given by the Italians or the Belgians. It was the strike last year.

Northern Region

Mr. David Watkins: asked the Secretary of State for Industry what initiatives he is now taking to stimulate the growth of industry in the Northern region.

Mr. MacGregor: Industrial growth in the Northern region, as in any other region, can only really be achieved by tackling the underlying causes of its deep-seated problems. The measures that we are taking nationally will help create the climate in which this can be achieved, but much will also depend on the attitudes of local

management and work force. The hardest-hit areas of the North will continue to benefit from regional aid to help encourage the necessary process of change, and the hon. Member will be aware of the special efforts that we are making in this regard in specific areas like Consett.

Mr. Watkins: Is the Minister aware that the number of new jobs in prospect in my constituency can be numbered in dozens, when the number needed is 10,000? This is happening in an area where, as the Minister says, there is the greatest concentration of Government initiatives in the whole region. What hope exists for the Government's policy and philosophy in Consett, Stanley or the whole of the Northern region?

Mr. MacGregor: The hon. Gentleman must recognise that it takes time to bring about industrial restructuring. It is especially difficult at a time of world recession when a large number of companies, including international companies, are not looking to move elsewhere. The hon. Gentleman will be aware, however, that the local industrial committee is dealing with over 90 active industrial inquiries, many of which are now reaching maturity. We must hope that these will provide a substantial number of jobs.

Mr. Beith: How can the hon. Gentleman say that the hardest hit areas are protected by regional aids when areas such as Alnwick and Amble, with high levels of unemployment, have been denied that aid? This has implications for European grants as well as for British Government aid.

Mr. MacGregor: We have made it clear that it must be right to concentrate the Government's assisted area policy in areas of highest need. The North benefits a great deal. Following all the changes, nearly 90 per cent. of the working population of the Northern region will remain in assisted areas. In the North alone, over £250 million in regional aid has been spent to help with restructuring and new investment since the Government came to power.

Sir William Elliott: Will my hon. Friend accept that many new businesses are coming to the Northern region and providing a great number of new jobs? [HON. MEMBERS: "Where?"] An equal number of jobs to those lost on the trading estates in the past 12 months have been provided. I wish that Opposition Members would examine the facts. Does my hon. Friend agree that the enterprise programme announced by the Chancellor of the Exchequer on 5 May, indicating to small business men and entrepreneurs a wide range of incentives available to those wishing to start their own businesses, is of the highest importance to the region? Will he ensure that the publicity associated with this programme is given the widest distribution?

Mr. MacGregor: I agree with my hon. Friend. Small firms and new firms can play an important part, not only in providing jobs, but in changing the psychology and climate in the Northern region. My hon. Friend will know that under the Government's measures the North, has two enterprise zones and receives much assistance through the inner city areas programme, in which small firms often play a prominent part. I shall do everything that I can to help with publicity. I hope to chair a conference in the Northern region later in the year.

Mr. John Garrett: Does the Minister realise that the Opposition want action and not whistling in the dark?


Since the Government came to power, 80,000 jobs have been lost in the Northern region. It will end up, before long, as the most devastated industrial area of Western Europe. When will some positive action be taken?

Mr. MacGregor: If only some of the decisions to achieve industrial restructuring and produce competitiveness had been taken earlier, we would not be faced with the position that now exists. The hon. Gentleman calls for action. The hon. Gentleman must accept that £250 million of aid, a greater concentration of assisted area status and a range of other measures are real and positive signs of action. However, such support cannot be carried to the point where Government spending increases to too high a level, puts further pressure on the PSBR and so affects interest rates and hits existing firms in the region.

Automation

Mr. Gwilym Roberts: asked the Secretary of State for Industry if he will take steps to stimulate the growth of the British robot industry and the use of automated techniques and systems generally; and if he will make a statement.

Mr. Kenneth Baker: I am well aware of the importance of the rapid introduction into industry of automated systems and other forms of modern production technology. The primary responsibility for ensuring that robots are introduced rests with those who sell them and those who use them. The Department encourages awareness of the potential of robots and provides financial support for their manufacture and use, as well as for relevant research and development within existing schemes.

Mr. Roberts: Is the hon. Gentleman aware that in some of the new production lines of British Leyland, and in other similar installations, many of the robots and even the automation processes involved have been imported? Is he aware that robots are imported because they are not available from British manufacturers? The automation industry is generally doing well, but will the hon. Gentleman do something to stimulate British robot production?

Mr. Baker: I accept that other countries are more advanced than we are in the development of robots and robotics. The number of robots being used in Japan is equivalent to the total in use in the rest of the world. However, we have a programme of support. We sent out a leaflet six weeks ago and we have already had about 200 responses, 80 of which are from British manufacturing industry. Labour Members should not scoff, because we spend several millions of pounds a year in this area, and British technology, bringing together microelectronics and production engineering, does not need to be ashamed of its work. The Government are helping and supporting users where they can.

Oral Answers to Questions — ATTORNEY-GENERAL

Operation Countryman

Mr. Christopher Price: asked the Attorney-General whether he has yet decided to bring further prosecutions of members or former members of the Metropolitan Police as a result of Operation Countryman.

The Solicitor-General (Sir Ian Percival): The Countryman investigation is still in progress and decisions to bring further prosecutions of members or former members of the Metropolitan Police will be made as and when further reports are submitted to the Director of Public Prosecutions for his consideration. In the past week my right hon. and learned Friend the Attorney-General has consented to two further prosecutions arising out of this investigation.

Mr. Price: I thank the hon. and learned Gentleman for that reply, and we understand why the Attorney-General is not here. Will the Solicitor-General confirm that the single failure in a recent prosecution will not affect the operation of the "51 per cent. chance of prosecution" rule that the Attorney-General operates? Does he agree that if there are cases of police officers having been convicted or disciplined, or having resigned as a result of Operation Countryman, the convictions based on the evidence of those officers should be reviewed and, if necessary, sent back to the Court of Appeal?

The Solicitor-General: I give the hon. Gentleman the assurance that he asked for in the first part of his supplementary question. Each case will be considered on its merits. At the moment eight officers stand charged with criminal offences. Four have been committed for trial, the committal proceedings in the other four cases will go ahead and the investigation is continuing. Further reports will be submitted, and I confirm that they will be considered on their merits.
On the second part of the hon. Gentleman's question, I am not in a position to give an answer to that——.

Mr. Russell-Kerr: Come on, try.

The Solicitor-General: The hon. Member for Feltham and Heston (Mr. Kerr) might think that when one is not in a position to give an answer it is better to say so. The hon. Gentleman did not give me a chance to utter the second part of my sentence. I will see that the hon. Member for Lewisham, West (Mr. Price) receives an answer from my right hon. and learned Friend the Attorney-General, who, as the House knows, is fully engaged elsewhere.

Jury Service

Mr. Chapman: asked the Attorney-General if he will take steps to alter the arrangements requiring persons summoned for jury service to attend courts so as to minimise the time spent awaiting empanelment.

The Solicitor-General: Though some waiting time is unavoidable, the Lord Chancellor is anxious to make any changes which would reduce it, provided, of course, that the proper operation of the courts is not impeded. My hon. Friend may know that a departmental study group has recently reviewed the administrative arrangements for the summoning and service of jurors, and a copy of the report of that group will shortly be placed in the Library.

Mr. Chapman: I am aware of the initiatives, but does my hon. and learned Friend recognise that there seems to be an increasing number of complaints from those who are called for jury service, not only about the time that seems to be wasted between arriving at court and being empanelled, but about the uncomfortable conditions in which they unsually have to stand and wait before being


summoned and, I regret to say, about the inconsiderate attitude of many court officials during that period? Will my hon. and learned Friend ensure that the Lord Chancellor's Department, which is reviewing the general system of jury service, takes those points on board?

The Solicitor-General: I am aware that all too often there is some waste of time and that people are required to wait about in wholly unsuitable conditions, and I do not doubt that sometimes a busy official is less than considerate. It is because we are aware of all those practical difficulties that the Lord Chancellor is anxious to reduce delays.
I am also aware of the unfortunate experience suffered by one of my hon. Friend's constituents. It was most regrettable and I echo the apology offered to him by the court in question. My hon. Friend will be glad to know that as a result of changes already set in motion at that court, but not coming into operation until two days after the incident involving his constituent, it is unlikely that anyone will be placed in a similar position again.

Mr. John Morris: Will the Solicitor-General consider the question of summoning juries for coroners' courts? Is he aware of the dissatisfaction that was felt, long before recent events, about coroners' courts, the way in which they were conducted, the standard and experience of coroners in controversial cases and, occasionally, the controversial question whether juries should be summoned?
I agree about the importance of inquiry into unexpected deaths, but will the hon. and learned Gentleman consider the whole institution of coroners' courts and whether a high-powered body with a jury would be more satisfactory in controversial cases?

The Solicitor-General: I readily agree that recent events have renewed interest in all those questions. Certainly there are many who are interested in them and anxious to find answers. The right hon. and learned Gentleman will know that the departmental responsibility is that of the Home Office, but I do not say that to seek to avoid the issue. The right hon. and learned Gentleman may rest assured that my right hon. and learned Friend the Attorney-General and I share his concern that all those matters should be remedied in the best way possible.

Mr. Lawrence: Is my hon. and learned Friend aware that, further to the point raised by my hon. Friend the Member for Chipping Barnet (Mr. Chapman), juries are too often kept in ignorance of their function and their rights and duties? Will he look into that aspect of the matter when considering what better provision can be made for the treatment of juries?

The Solicitor-General: I am aware that practice varies from court to court. In some courts—indeed, in most courts—judges are at pains to explain to jurors who have not been called that there has to be a margin to allow for challenges and so on. Much depends upon how everybody in the court concerned deals with the issues, but certain measures are being suggested from the centre, such as telephoning in. Instead of waiting in the court, jurors could telephone at a specified time to find out when they were next wanted. We must combine all the practical possibilities to improve the lot of jurors.

Mr. Alan Clark: asked the Attorney-General whether he is satisfied with existing law and procedures governing the empanelment of jurors.

The Solicitor-General: Some changes have recently been made in the administrative arrangements for summoning jurors for service in the Crown courts, and other changes in practice and procedure are under consideration.

Mr. Clark: Does my hon. and learned Friend agree that recent experience in Bristol, which is likely to be repeated in London following the Brixton riots, suggests that black jurors, whether out of racial loyalty, fear of intimidation or a combination of both, are highly unlikely to convict accused black persons of offences connected with civil disturbance? As the criminal law allows trials to be moved from areas where local prejudice might interfere with a proper verdict being returned, does he think that it might be appropriate to adopt that procedure in such cases?

The Solicitor-General: The answer to the first part of my hon. Friend's supplementary question is that there might be something in what he says in certain circumstances, but overall I do not believe that that is the experience of the courts. For many years people of all colours and races have served on juries. I am sure that the right hon. and learned Member for Aberavon (Mr. Morris) will agree that it is not experience, but a general feeling, that my hon. Friend has expressed.
On the second matter, I have said that there might be cases in which there is that danger, but not necessarily because there are black faces. There might be a variety of reasons. There is power in the courts to deal with that. The Crown court may order a change of venue, on the application of either the prosecution or the defence, if the circumstances suggest that such a course is desirable. It is very rare for the Crown to ask for such a transfer, but in a recent case a transfer was made on the application of the defence and there was no difficulty in the change of venue.

Mr. John Morris: Will the Solicitor-General accept that Labour Members, including myself, warmly endorse his general repudiation of the question asked by the hon. Member for Plymouth, Sutton (Mr. Clark)? The experience of those who practise in the courts is that there is no evidence to suggest that there is a general inclination of juries to reach different verdicts, depending upon their colour. Perhaps the wrong charge was brought in the case that was mentioned, and that may have been the reason for the verdict that was brought in.

The Solicitor-General: I do not want to get involved in details. I have repudiated the general proposition. Because I have done that, it does not mean that there may not be some circumstances, not necessarily associated with colour, in which there is some difficulty in obtaining an unprejudiced jury.

European Community

Ordered,
That European Community Document No. 7972/80, concerning environmental assessment of projects, be referred to a Standing Committee on European Community Documents.—[Mr. Thompson.]

Housing Policy (Scotland)

Mr. Hugh D. Brown: I wish to call attention to Government housing policy in Scotland, and beg to move,
That this House condemns Her Majesty's Government for its failure to produce a housing policy relevant to the needs of the people of Scotland.
I realise that this is not a popular day—on a light Whipping—to be in the House at all, but I can assure all hon. Members who are present that I shall not draw attention to the absence of any one Member. Many hon. Members have apologised for their absence. May I say to my hon. Friend the Member for Aberdeen, North (Mr. Hughes) that I realise that I may have caused some inconvenience to the members of the Select Committee on Scottish Affairs, but as it examined the matter of wider capital allocation it is appropriate that some of its members should be present today.
I had great difficulty in deciding on a subject for debate. I do not know whether the fact has any merit, but it happens to be my birthday today. When I say that my birthday is shared by His Holiness the Pope and the right hon. Member for Chelmsford (Mr. St. John-Stevas), it will be clear that I am merely stating a fact and not drawing any conclusion from it, other than to admit that when I put my name forward in the ballot I thought that it might be a lucky day for me. During all my years' membership of the House, this is the first time that I have been successful in the ballot, though some years ago I was first in the ballot for Private Members' Bills.
The choice of housing for discussion was a difficult one, because there are many aspects of Government policy that can be criticised. I thought of the investment by British Leyland in Scotland. Then I thought of fuel disconnections that are taking place, where to some extent the electricity boards are being unfairly condemned in public, though I wish that they would state their case a little better. There are also the problems of the lack of take-up of benefits in Scotland, the future of local government, and the Stodart report. May I say as an aside to the Minister that even the minor problem of the West Lothian question, and the circumstances in which its councillors might feel that they have to break the law are worthy of attention. I hope that the Minister will look sympathetically at the problem of the Murrayfield estate—one of the most difficult to let in Scotland. Even students from Edinburgh would not rent the properties for virtually no rent. I hope that the Minister will view sympathetically the problems that that has caused the council.

Mr. Russell Johnston: Will the hon. Gentleman make clear to the House that he is talking about the second West Lothian question?

Mr. Brown: I think that the Minister knows what I am talking about. It is the kind of question that could have been dealt with at greater length and more adequately if we had had a Scottish Assembly—which, of course, I would wholeheartedly have supported.
Since deciding that housing and the wide motion that I have tabled was a suitable vehicle for discussing all aspects of housing in Scotland, two or three events have taken place.
Of course, housing is always an important subject. Occasionally I quote the Secretary of State for Scotland,

and in his opening speech on 14 January, in introducing the Bill on tenants' rights, he gave one or two interesting statistics. Since 1971 Governments have spent at least £3½ million on housing in Scotland, and 25 Acts of Parliament have gone through the House since the war. There has been no lack of interest in the subject, but whether the legislation has been correct is a matter of opinion. Nevertheless, the subject is an important one, and I make no apology for having chosen it.
I said that three things had happened since I chose the subject. There has been the Tory Party conference, a report was issued by Shelter, and important elections have taken place in the rest of the country, with all sorts of stories about the introduction of Marxism and Communism. At least Lothian and Dundee had a break when the elections were taking place down here. Nevertheless, housing played an important part in those three events, as I shall demonstrate.
I shall not attempt to justify everything that was done by the last Labour Government. I wish that my hon. Friend the Member for Central Ayrshire (Mr. Lambie) had paid more attention to some of the good things that we did. I have said on many occasions that I have a great respect for the Minister's debating skill. However, we can become too selective in our quotations. I want to refer to one quotation that he took from the Green Paper, which I am glad to say people now quote regularly and with more appreciation than at the time when it was produced. In a reply to a question last week from my hon. Friend the Member for Fife, Central (Mr. Hamilton), the Minister said:
'the overall housing shortage is virtually a thing of the past in most areas and the worst problems of overcrowding and bad conditions have been dealt with. '" 
If ever there was a selective quotation, that is it. Immediately preceding those words in the Green Paper is the following passage:
Housing conditions in Scotland have been transformed over the past half-century. Housing provision has improved steadily".
No one would dispute that. The passage that the Minister quoted is followed by this significant sentence:
But some serious problems remain and the new problems are emerging.".
The Minister nods his head in agreement, but it was dishonest to give that selective quotation, as if we had ever been complacent, merely because there was statistical evidence—some people still dispute it—that there were more houses available than there were households in Scotland.

The Under-Secretary of State for Scotland (Mr. Malcolm Ritkind): I gave that quotation in answer to a question asked by the hon. Member for Fife, Central (Mr. Hamilton), who had asked what the Government were doing about, to use his own words
the acute housing shortage in Scotland."—[Official Report, 13 May 1981; Vol.4, c. 761–2.]
If it is believed that there is an acute housing shortage in Scotland, I am entitled to point out that the Labour Government said in 1977 that
the overall housing shortage is virtually a thing of the past".
If that was true in 1977, it can hardly be less true in 1981.

Mr. Brown: The hon. Gentleman had better reflect on what he has just said, because it is not very clever. [Interruption.] If some Conservative Members present are not interested in Scottish housing, perhaps they will continue their conversations outside the Chamber. I have better manners than some hon. Members.
Four years ago new problems were emerging, and there were existing problems even then. Much has happened in four years, and it has not helped the people with a housing problem in Scotland. Four years is a long time, even in housing matters. The Minister should not try to score debating points unless he is sure that he has all the weight of opinion in Scotland behind him. I suggest that he has not.
Let me look at the official housing statistics from the Minister's Department. The number of dwellings completed in Scotland in 1980 was 20,540, a decrease of 3,140, or 13 per cent., on the total for the previous year. Completions in the private sector fell by 19 per cent. from the record level of 1979 to just over 12,000. The number of starts during the whole of 1980 was 16,410, which was 29 per cent. lower than in 1979. Public sector starts were at their lowest since the war and private sector starts fell below 1,000 for the first time since 1970.
However flattering an interpretation anyone makes of the housing scene in Scotland, by no stretch of the imagination can that be described as anything other than a serious sag in house building, when there is still a need for new houses. We can argue about whether they shall be in the public or private sector, and in what proportion.

Mr. Ian Lang: Does not the hon. Gentleman agree that the excess of dwellings over households was 192,000 in 1980?

Mr. Brown: That is a bit of sheer statistical information. We used such information when we were in Government, and I recognise its basis, but it needs a great deal of qualification and examination. There is no justification for saying that because we have this wee bit of statistical information we shall do nothing about housing. The hon. Gentleman can make his own speech, but it is naive and superficial merely to use that one bit of information without looking at what is behind it.
No matter how difficult the position may be, all Governments and all Ministers have to try to put a bright face on things—nowhere more than at party conferences. Therefore, I was not surprised at what I saw in The Scotsman on Friday 8 May. I must quote as many newspapers as I can, in the hope that I may get a wee mention. There is nothing personal, but I have been feeling a wee bit neglected for the past couple of years.
Here is a marvellous headline:
Confident Rifkind goes on attack".
Great stuff! The report underneath begins:
A self-confident picture of exciting social and industrial change in Scotland was painted yesterday by Scottish Office Ministers on the opening day of the Scottish Conservative Party Conference at Perth.
Then the Minister is reported as telling the conference of
'immense popular support' for the Government's public housing sales scheme throughout the Labour-dominated council estates of Scotland.
He predicted—perhaps he will correct me if I am wrong—that total sales would reach 100,000 a year.

Mr. Rifkind: indicated dissent.

Mr. Brown: The reporting was ambiguous. From the report the hon. Gentleman seemed to be suggesting that figure, but now it appears that he was talking about the sale of approximately 30,000 houses a year. He said that that would be a great benefit. The report continued:
He advised Tory activists that they would get a 'superb response' from tenants living in Labour-controlled areas. 'We are

on a winner', he declared. The more Labour opposed the measure with their 'stupid obscurantist approach' the more tenants flock ed to buy.
We all know the feeling of sometimes being carried away with an over-enthusiastic audience. That was on the opening day. Those present did not have much to enthuse over as the conference went on.
I know that it may be unfair to quote those remarks, because it is only a brief report of the Minister's speech, but it is significant that in the view of The Scotsman the highlight of the opening day was that reference to the sale of council houses. We do not agree with those sales, but they represent the only semblance of a policy that the Government have.
Along with the reductions in capital allocation, a worrying aspect of Scottish housing at present is the Government's decision to link rent and rate contributions to capital allowances. My hon. Friends on the Select Committee have prodded the Minister on this matter. That disturbing trend is contrary to the voluntary approach and the good relationships between central Government and local government that I have always thought to be essential.
The trend is having a souring effect on relationships with bodies such as the Scottish Special Housing Association, whose allocation has been cut, and the Housing Corporation. This year no new housing associations will be formed in Scotland, even though they were one means that many authorities could foresee being used to contribute to the removal of sub-tolerable houses and generally improve the standard of housing for many people.
The Government's disastrous housing policies, the failures of their overall economic policy, which are responsible for the cuts in housing allocations, are having several effects on the people of Scotland. I should like to illustrate that by looking briefly at the problems of dampness in housing, using Glasgow as an example. Shelter has published one of its better reports——.

Mr. Peter Fraser: I am anxious to follow the points of emphasis that the hon. Gentleman said should be followed in Scotland. However, I am unclear about one matter. The 1977 Scottish housing Green Paper—of which, I understand, the hon. Member for Glasgow, Provan (Mr. Brown) was the author—reaches a conclusion on page 20, following a detailed analysis of pupulation and the number of houses. It says
The exercise does, however, confirm that the shift of emphasis in recent years from new building to expenditure on existing housing stock—as demonstrated by local authorities' programmes—is a sensible one for Scotland as a whole which in future years should be reinforced".
That is a policy which the hon. Gentleman at that time supported. Does he now depart from that or feel that a concentration of effort in other directions is required?

Mr. Brown: I was not the sole author of that paper. My modesty prevents me from saying that I was. [Interruption.] Hon. Gentlemen who are making so much noise were not Members at the time.

Mr. David Lambie: They will not be here next time either.

Mr. Brown: Although I might be here, I am sure that I shall not be producing the next housing paper. The trend at that time was quite correct. I do not take anything back, but I have qualified it by saying that we needed to consider


the new problems that were emerging. the formation of single-person households was one thing. There is nothing inconsistent between what is contained in the Green Paper and what I am saying. There is a bad bit in everyone, and I have a wee bit of badness in me, too. I shall use that to illustrate one of the problems and to raise with the Minister and his hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) one of the nastier amendments that they inflicted on me in my lifetime as a Minister.
The Shelter report is one of the best that it has put out. It has brought together some of the trends that I have mentioned and given much detailed information. We are indebted to Shelter for that. Page 2 contains a catalogue of concern about the Government's housing policies. It concludes by dealing with dampness and says:
Nor does it include the 150,000 council houses which are affected by condensation and dampness and making life hell for their tenants. Simply to tackle this problem, a recent report estimates, would cost £500 million.
On page 10 of the report Shelter deals with Glasgow. It says:
an estimated 35,000 public sector houses (a fifth of the total) are suffering from dampness, particularly condensation, with a remedial cost of £4,000 per house.
That is a great deal of money to have to spend even by Glasgow standards.
On Edinburgh, the report says:
The city has an acute dampness problem. According to its own estimates, 10–12,000 of its council housing—between 17 and 21 per cent.—are suffering from substantial dampness. The official rough estimate of the cost of remedying the problem is £40 million. For 1980–81, it was reported that the council had set aside £450,000 to combat dampness: at that rate it will take 88 years to finish the job.
Not even Councillor Waugh can juggle the figures to avoid the conclusion that Edinburgh is not seriously tackling the problem of dampness in council houses.
One of the things of which people accuse politicians is irresponsibility in opposition. There is some truth in that. I hope that I have never been too guilty of it. The hon. Member for Edinburgh, West supported an amendment to the Housing (Scotland) Act in February 1978—I have waited a long time to get my own back on him and his hon. Friend. Here is what Gentleman Jim said:
First, that there should be rent and rate reductions for the tenants; and, secondly, that full compensation should be paid for damage to tenants' property caused by dampness …The purpose of the amendment is to provide that there should be an obligation on the Secretary of State to take this sort of matter into account."—[Official Report, 28 February 1978; Vol. 945, c. 298.]
All I conclude from that is that for the past two years the hon. Member for Edinburgh, West has been seeing the Secretary of State every day to ensure that the Government take that into account. As far as I know, he has not been successful, but that did not prevent him from taking that irresponsible opportunistic line in supporting an amendment. The Minister, too, was on form that day.

Mr. Robert Hughes: I understand that the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) is a considerable boxer. I should remind my hon. Friend that he is the converse of Muhammad Ali in that he floats like a bee and stings like a butterfly.

Mr. Brown: I shall make no comment. The Minister was carried away, too. He said that I said—although I did not say it:
The Minister said that the problem of dampness was like influenza in its geographical application. But the reaction from both sides of the House suggests that the disease is reaching epidemic proportions. The problem is more serious than the Minister accepted. He said that the concentration of dampness was not substantial in any one particular area and that the number of houses affected was limited. We can give examples from our constituencies".—[Official Report, 28 February 1978; Vol. 945, c. 307.]
I must make the qualification that I did not say that. That is what the Minister said I said. There is a vast difference because I was never complacent about it.
The Minister said that he could produce figures that suggested that in areas of Edinburgh almost 80 per cent. of council houses were suffering from dampness. Gentleman Jim's figure was 50 per cent. of council houses, although he skilfully left the impression that it covered a wide area, it covered only Wester Hailes and one or two small schemes. However, for the purpose of knocking hell out of me they dispensed with one or two of the finer points. The general impression was that dampness was a massive problem and that the Government needed to devote extra resources to it.
It is a waste of time mentioning the hon. Member for Southend, East (Mr. Taylor) because he has gone. We expected irresponsibility from him. That is not good enough for anyone who purports to be leading opinion about Scottish housing. I am not being too personal when I say that I hope that the Minister will take on board that Ministers must be more responsible in housing if we are to get action on such serious problems as dampness. The amendment was shocking, but the question still remains: are the Government prepared to recognise the special problem about dampness in Scotland? Will they do what they said in Opposition they would do and make extra resources available to those authorities which would submit plans in context of their housing policy? It is a shocking indictment of the Government's approach that they have done nothing. Even the SLASH report draws attention to it. The Scottish local authorities special housing group is a Government-backed body.

Mr. Albert McQuarrie: The hon. Gentleman said that a considerable number of local authority houses in Scotland had been affected by this problem over the years, and I agree that it is a considerable number. However, in his condemnation of the present Government's policy, does he suggest that the condensation problem has arisen only in the last two years—in other words, since this Government came to office? He must rememeber that the houses of which he speaks were built mainly under the Parker Morris scheme, approved by the Government and by the local authorities. If the condensation has shown itself in these houses over the years when Governments of both parties have been in office, ought not radical action to have been taken by the Labour Government to get rid of the problem? Is not the hon. Gentleman being rather unfair in laying the problem at the door of this Government?

Mr. Brown: I hope that the hon. Member for Aberdeenshire, East (Mr. McQuarrie) is a better builder than he is a politician. I am not daft, and I am not making any party point about this. I am challenging the Government to show their concern about the problem,


even in the difficult financial circumstances of today. I am suggesting that this is probably the worst problem in Scottish housing. I appreciate that it is easy to criticise because I am not a member of a local authority. However, if I served in a local authority, I would regard the solution of this problem as a priority. We are talking about council houses. A person living in a house which is unsatisfactory because of dampness and condensation deserves the maximum of sympathy, understanding and priority.
Some of my hon. Friends have suggested that officials have been known to say to tenants "If you did not breathe so heavily at night, you would have no condensation problem." The matter is too serious for flippant comments of that kind. There is a real problem, and I hope that the Government will demonstrate their concern about it.
I conclude my speech with a comment on how I see the present Government's disastrous policies affecting Glasgow. I am told that it is not just in No. 10 Downing Street that there is a mole, but that there is even one in the Glasgow housing department. A leak appeared in the Glasgow Evening Times on 8 May about Housing Plan Four. The headline ran:
Crisis looms: Housing shortage could hit 60,000.
Whether that exaggerated headline was justified is a matter of opinion, but I might point out that, even in the context of dampness, Glasgow is reaching the stage where it may be paying out more or losing more by way of compensation to tenants and loss of rent revenue than it will be able to afford in its capital allocation to carry out remedial work. That is the size of the problem in Glasgow. To be fair, it has at least made some effort to assess the size of the problem.
Glasgow sees a gloomy picture developing in 1981–82. On the basis of a capital allocation which is the minimum figure of £55·3 million, it reckons that 60 per cent. of the allocation will be required for its Housing Plan Three. The Minister referred to this in his evidence to the Select Committee. He said that Glasgow's housing plan was not unrealistic. All housing plans get much nearer to the reality of the problem as time goes on, and Glasgow's is a pretty realistic one. It thinks that its allocation will be 60 per cent. of what it considers necessary in its Housing Plan Three.
That means that, in 1981–82, there will be no new build starts for ordinary housing in Glasgow. It means cuts in sheltered housing. It means no new large houses with gardens in the peripheral estates for larger families. That is one of the acute shortages in types of housing, and it is one of the problems in the peripheral areas. It means cuts in the provision of two-apartment houses. Everyone knows that there is a gross shortage of two-apartment houses throughout Scotland, especially in Glasgow. It means no development in key sites in GEAR or in the Maryhill corridor. It means that rehabilitation efforts will be halved. It means the excellent work that has been done in Saltmark in Glasgow being curtailed to the extent that it will be 20 or 30 years before some pre-1919 council houses are tackled in that comprehensive way. In terms of modernisation, some 27,000 inter-war houses need to be tackled; it could take 10 years. Among post-war houses, some 30,000 need rewiring. Each contains an element of danger. They need rewiring now, 16,000 of them urgently. All that is to be put back, and that says nothing of the number of houses, still with lead pipes in them, which need improvement.
I finish on a constituency note to underline the disastrous effect that Government policies are having on Glasgow district council. It has to make reductions in environmental improvements in the peripheral areas. Fewer front doors are being put in closes, and fewer gates are being put in back closes in some of the difficult-to-let housing areas. That represents a real problem—a social problem as well as a housing one.
The SHAC committee's report has never been debated in this House. The reasons are obvious. This Government do not want debates on housing. However, I thought that the committee drew attention to this problem in its report on difficult-to-let housing in a rather dramatic way when it said:
The gulf between the standard of these estates and the most popular housing is immense … Such differences should not be tolerated, and the basic aim for future housing policy must be to narrow the gap by improving the difficult-to-let estates. This requires considerable financial and staff resources and in the short term it may well be necessary to discriminate in the allocation of resources in favour of the problem schemes. We appreciate the likelihood of adverse reactions from the tenants of other areas, but it must be recognised that the continuing existence of difficult-to-let areas not only aggravates many existing social problems for which the community as a whole has to pay, but perpetuates them into the next generation. Indeed we doubt whether there can be any other problem facing local government which merits higher priority.
This Government have a strong bias towards their wealthy backers and against council housing estates. There is no doubt that, whatever other arguments there may be, in the peripheral estates in Glasgow and in the difficult-to-let areas where more than 50 per cent. of tenants are in receipt of rent rebates not many houses will be bought or sold. Do not let us kid ourselves. The Government are adding to the problem of these difficult-to-let areas with the policies that they are pursuing.
Selling council houses is not a policy. But if the Government indulge in it they should at least indicate that there is some value in it for housing authorities in being able to recycle the money which they get from the sale of such houses. The danger is that, if the Government proceed along the road which they are on now, they will find some way of assuming that housing authorities sell council houses, and will put the proceeds against their capital allocation in the same way as they have done with rent and rates.
I warn the Government that there is a limit. I have great respect for civil servants. They will come up with a practical way to implement policies, however absurd those policies may be. I say that as a compliment to our civil servants, bearing in mind that policies are laid down by the Government. I hope that they are not playing around with this idea, which will increase further the poor relationship and the existing "aggro" in many housing authorities towards Government policy.
From a practical point of view, it would be desirable if housing authorities were able to acquire tenement property, rehabilitate it, and sell it in controlled circumstances, providing that they were allowed to recycle the resulting income for further rehabilitation and sales. I merely fling out that idea.
I am worried about the political scene in general. I hate the labels that are put upon people. I do not know whether I am Left, Right, or Centre, moderate or extreme. However, society must understand that no one—not even President Reagan, with his silly speech about Communism, which was reported today—can justify


organising ourselves in such a way that when we have skills in building workers and we have materials, we have people who are inadequately housed. No one can justify the present level of unemployment. The longer it continues and the worse it becomes, the more and more people will want radical alternatives. That is not a fear on my part, because I do not run away from it. Even the scales to which I have referred, of Left-wing dictatorships in the Greater London Council, in Dundee, in the Lothian region or in Glasgow, are absolute rubbish. They are an indication, although not details, of many people who are concerned about the kind of society we have today, the problems of which are being made worse by the Government pursuing the housing policies to which I have referred.
It is for those reasons that the Government should be condemned.

Mr. Iain Sproat: I am extremely glad to have a chance to take part in this very important debate—at least, I think that it is important, and obviously my hon. Friends think so. It seems that Opposition Members think that it is rather less important. Unusually for such a debate, Scottish Conservative Members appear to outnumber Scottish Labour Members. I hope that the friends in the media to whom the hon. Member for Glasgow, Provan (Mr. Brown) referred will take note of that as well as of the points that he made.
I congratulate the hon. Member on his good fortune in coming top of the ballot and on the usual moderate way in which he made most of his speech. I also congratulate him on concentrating the attention of the people of Scotland on one of the Conservative policies in Scotland which is most widely known and most widely approved—the sale of council houses. Conservative Members welcome any opportunity to explain to people in Scotland, and to try to convert Opposition Members to the essential virtue of our policy of selling council houses.
However, although the sale of council houses is the matter most in dispute in housing in Scotland, the hon. Member mentioned it but skirted around it. He was a little coy about exactly where he stood. He showed general disagreement, but he was noticeably short of examples to justify his root and branch opposition to council house sales.
Conservative Members notice that whenever Labour Members speak about housing, either in this House or in Scotland, they face a number of familiar dilemmas. They never know whether to say that no one in a council house wants to buy his own house so there is no problem, or that so many council tenants will want to buy them that there is a massive problem. The hon. Member for Provan did not face that dilemma.
There is another problem, particularly for Labour Members. I think that only one Labour Member now in the Chamber lives in a council house. I think that it is the hon. Member for South Ayrshire (Mr. Foulkes).

Mr. Lambie: Central Ayrshire.

Mr. Sproat: Yes, Central Ayrshire. The hon. Member for South Ayrshire (Mr. Fraser) certainly does not live in a council house. My hon. Friends might like to speculate whether it is more hypocritical to attack the sale of council houses if one owns one's own home and does not live in

a council house oneself, or whether it is more hypocritical for the hon. Member for Central Ayrshire (Mr. Lambie) to earn nearly £20,000 a year to live in a subsidised council house, and to scrounge off the ratepayers.

Mr. Lambie: I am grateful to the hon. Member for drawing attention to the fact that I stay in a council house. He will recognise that I am in good company, because the Royal Family stay in a council house. Princess Anne will be taking her new child back to a council house. If it is good enough for them, it is good enough for the hon. Member for Central Ayrshire.

Mr. Sproat: I am always anxious to give time for the pro-Monarchy opinions of the hon. Gentleman. We respect him, because at least he sticks by his views. But there is one other dilemma on the question of council houses which the hon. Member for Provan skirted around. I well remember that on Second Reading of the Tenants' Rights, Etc. (Scotland) Bill, a number of Labour Members, including the hon. Member for Glasgow, Garscadden (Mr. Dewar), told us that people would need their heads looking at—I use Labour Members' elegant oratory—if they bought any of the council houses in which they lived. It is a shocking reflection on what Labour Members have compelled so many people in Scotland to live in over the years that they now think that so many of these houses are so rotten that they do not think that people will buy them.
However, Labour Members are wrong, because even those houses in the lower amenity areas, to use the current euphemism, are being sold and will be sold—I hope that my hon. Friend the Under-Secretary will give evidence of this—because the market finds the price. It pays many young people starting off to buy at a bargain price a house or a flat in an area which is not so good as some other council house areas.
In all these dilemmas and difficulties around which the hon. Member for Provan skated, Opposition Members, as so often, will not face up to the fundamental facts about council house sales. The two fundamental facts are, first, that we know from every opinion poll ever taken on the subject that at least three-quarters of the families in Scotland back the Government's legislation and want the opportunity to buy their own council house and want that right in principle; secondly, we know that it is not merely a question of principle but that already, in their tens of thousands, the people of Scotland—the hon. Member for Garscadden smiles. Perhaps he does not know that literally tens of thousands of families in Scotland are involved. My hon. Friend the Under-Secretary will give us the latest figure. It is over 30,000 already, and the legislation has not even begun to gather momentum.
It is clear that Opposition Members do not recognise that the majority of people want to buy and that tens of thousands of families in Scotland have already applied to exercise that right.

Mr. Robert Hughes: Given the hon. Gentleman's well-known passion for people owning their own houses and being allowed to buy them at discount rates, why do his Government not support the selling of private tenanted houses on exactly the same basis? Will he explain why what is good for council house tenants is not good for private tenants?

Mr. Sproat: Yes, I shall do so gladly. I give two answers. First, in col. 1345 of Hansard for 14 January


1980, the hon. Gentleman will find it well set out by my hon. Friend the Under-Secretary. Perhaps I could save the hon. Gentleman the bother by saying that there is an important distinction between public, local authority housing——

Mr. Robert Hughes: Profit.

Mr. Sproat: It is not profit. It is that the Government have the right to legislate for public housing because it is public housing. They do not have the right to legislate for what private individuals own.

Mr. Robert Hughes: Of course they have that right.

Mr. Sproat: There is a great difference between local authority housing which belongs to the community and over which the community has a right to have a say, as a group, and private houses which are owned by individuals.

Mr. John Maxton: Will the hon. Gentleman give way?

Mr. Sproat: I shall give way—for the last time—to the hon. Member for Glasgow, Cathcart (Mr. Maxton).

Mr. Maxton: Does the hon. Gentleman accept that, certainly in my constituency, there are houses that are rented privately that were built by public subsidy, and that many private landlords receive rent on properties on which they have received public subsidies in the form of improvement grants and through rent rebates paid to them by the State?

Mr. Allan Stewart: So what?

Mr. Sproat: In the elegant phrase of my hon. Friend the Member for Renfrewshire, East (Mr. Stewart), "So what?" I just ask the hon. Member for Cathcart, if he as a private owner occupier accepts tax relief on his mortgage.

Mr. Maxton: Yes.

Mr. Sproat: I bet he does. I bet that he is very happy to take advantage of this fact. The hon. Member for Aberdeen, North (Mr. Hughes) may be interested to know that Aberdeen has an exceptionally good record in the sale of council houses. I think that it is about 300 sales and 1,840-odd applications so far. It is clear that the people of Aberdeen back my view and our view on these Benches, rather than the view of the hon. Member for Aberdeen, North. It is no good the hon. Gentleman shaking his head. These are the figures and they have been checked recently.
Perhaps I could remind Labour Members why the policy of selling council houses is so popular in Scotland. It is because the people of Scotland, however they may cast their votes, believe with us in the principle of the extension of freedom, the freedom for the individual to exercise his or her own right. I know that Labour Members have been rather scathing on occasions.

Mr. Donald Dewar: Not at all.

Mr. Sproat: The hon. Gentleman says, "Not at all", but he was the one who used the term "cracker barrel philosophy". It may be cracker barrel or it may not, but it is certainly a philosophy which is widely welcomed in Scotland. That is precisely because we are doing just as we have done in education. Just as we are giving parents the right over local bureaucrats to decide where they want

to have their children educated, so we are giving these who live in council estates the right to decide whether they want to live in council estates or in their own private homes. We are not telling what they have to do; we are giving them the opportunity to do so. They are only too glad to take up that basic freedom.
Since the hon. Member for Garscadden interrupted, he may remember that in the speech he made in the House some 18 months ago he said that the Bill was a fundamental attack on the principle of local democracy. Does he remember saying that? He certainly said it. I am glad to see that the hon. Member for Fife, Central (Mr. Hamilton) agrees with that view.

Mr. William Hamilton: I shall be repeating it.

Mr. Sproat: Labour Members confuse the principle of local democracy with the rights of local politicians and local bureaucrats. What we are doing is implementing the real principle of local democracy—that is, giving individuals living in the locality the right to decide what they want rather than allowing bureaucrats to say what they want them to do.
The second reason which should appeal to the Labour Party is that this splendid policy of council house sales has probably engineered, or is about to engineer, the most massive redistribution of wealth within Scotland, often in favour of those who vote for Labour Members. But my right hon. and hon. Friends do not mind because we believe that that is right and that individuals should have the freedom to choose whether they want their own housing. If that does mean a massive redistribution of wealth to those who are misguided enough to vote for the Labour Party—or at least those who have done so in the past; let us hope that they change their minds now—we welcome it.
The redistribution of wealth is what the Labour Party is supposed to be all about. But, in practice, when it comes down to the redistribution of wealth away from the local bureaucracy and back to individuals, then it stops. Then it reneges on its principles. Those who, for so many years have stood up as the champions of tenants' rights, at the end of the day refuse to champion the greatest right of all for tenants.

Mr. Russell Johnston: I agree with the principle of choice, but what about those who do not have the money to enable them to choose?

Mr. Sproat: I am not certain what the hon. Member for Inverness (Mr. Johnston) has in mind. I do not know which individuals he has in mind. We have made allowances not only for building societies to provide funds. In fact, local authorities have an obligation to provide funds if the family decides that it can afford to buy. That shows a typical difference between those on the Government Benches and those on the Opposition Benches. If an individual decides that he can afford it, if he is prepared to slave hard to own his own house, that is up to him to decide. It is not for Labour Members or bureaucrats to say, "No, you cannot afford it. We will not allow you to have your house."
Another reason, following on from that, is that the Bill to which the hon. Member for Provan referred rolls back bureaucracy. For too many years in Scotland local politicians and local bureaucrats have said to people who


live in council houses, "You cannot paint your door the colour that you want it. You cannot keep a dog even if you want to. You have got to get out of this council house where you have lived for 30 or 40 years because we have decided that you are no longer a suitable tenant."
That power has been exercised these many years by bureaucrats. We are getting rid of it in great part and once again we are giving power back to the individual. We are rolling back the tide of bureaucracy in Scotland. Also we shall be freeing some extremely able persons in local authority housing departments to operate in more profitable and valuable areas of the community.
This policy of council house sales will enable local authorities to concentrate much more closely on those areas upon which they are best suited to concentrate—housing for the elderly and housing for the handicapped.
I seem to remember the hon. Member for Dundee, East (Mr. Wilson)——

Mr. Gordon Wilson: No.

Mr. Sproat: I am sorry. I meant to refer to the hon. Member for Dundee, West (Mr. Ross). I genuinely apologise for that error. I can promise the hon. Gentleman that. The hon. Member for Dundee, West has said that there is nothing in the Tenants' Rights, Etc. (Scotland) Act that would improve the quality of the housing stock in Scotland. He is totally wrong. The Act will do a great deal to improve the quality of the housing stock because those who buy their own houses will be able to improve them. They will put money into them because they are their own, and they will feel that they have capital assets. They will feel that they are worth improving.
The second argument relates to what I have just said—that, because of council house sales, local authorities will be able to concentrate much more on those houses that remain and improve their quality. Therefore, the Bill not only gives freedom of choice; it does and will increase the quality of the housing stock in Scotland.
The last point of which I wish to remind Labour Members is that this housing sales policy will greatly increase social mobility in Scotland. That has great social and economic benefits. Nobody could represent part of the city of Aberdeen without knowing how often, when a job comes up in Aberdeen, somebody who wants it cannot take that job because he cannot get a house there. This is one of those common difficulties—not just in Aberdeen, of course—which will be greatly eased, because so many people will own their own houses that they will be able to sell. Therefore, the number of houses for sale will greatly increase.
Of course, it is not just a question of economic benefit.

Mr. Robert Hughes: Absolute tripe.

Mr. Sproat: The hon. Member for Aberdeen, North says, "Absolute tripe." If he has not come across persons wanting to work in Aberdeen who have not been able to because they cannot get houses in Aberdeen, he cannot have been doing his job as a constituency Member very well.

Mr. Robert Hughes: rose——

Mr. Sproat: No. I have given way about half a dozen times and enough is enough. I shall finish on this point of

social mobility. Many persons who have lived all their lives in council houses in the city would like when they retire to move into the country, into the beautiful constituency of my hon. Friend the Member for Perth and East Perthshire (Mr. Walker), for example——

Mr. David Myles: And Banff.

Mr. Sproat: Yes, or into the beautiful constituency of Banff of which my hon. Friend the Member for Banff (Mr. Myles) reminds me. They could not do that in the past, but now they will be able to sell their council houses and buy a little cottage in Macduff which my hon. Friend the Member for Banff has specially selected for them with an eye to helping all his constituents.
That is the sort of social mobility, economic benefit and social benefit that will flow from the Act. The House does not have to take my word for its benefits. It need only look at the thousands and tens of thousands in Scotland that are already taking advantage of it. I hope that those tens of thousands will grow many times over.

Mr. Gregor MacKenzie: My first pleasant task is to congratulate my hon. Friend the Member for Glasgow, Provan (Mr. Brown) on introducing the motion. It gives us all the opportunity to think about and discuss Scottish housing. Secondly, I must congratulate him because it is his birthday. I wish him many happy returns, both in years and in the number of elections that he will win in the future.
That is not the only anniversary. Seventeen years ago last Thursday, the hon. Member for Aberdeen, South (Mr. Sproat) and I presented our respective philosophies to the electors of Rutherglen. The question of housing figured largely at that time. The hon. Gentleman will not need to be reminded that on that occasion the electors of Rutherglen decisively concluded that the best hope of getting a good house was to ensure the return of a Labour candidate.
The hon. Member spoke today about the sale of houses, particularly council houses. My own attitude to this matter has always been crystal clear. I do not object to people owning their own homes. On the contrary, if they have the wherewithal and the desire to do so, I think that it is a good thing for them to aspire to own their own homes. But there are plenty of agencies other than local authorities which can provide such homes. What worries me about the hon. Gentleman's speech is that once again we face not only cuts in new housing but cuts in the number of houses now available to those who do not have the wherewithal to buy their own homes. That is a sad state of affairs. It is all very well for the hon. Member for Aberdeen, South to talk about freedom. There is not much freedom for someone who does not earn much money and who will be deprived of the only agency—namely, the local authority—which can provide him with a home.
During the speech of the hon. Gentleman and, indeed, in comments that I heard during the speech of my hon. Friend the Member for Provan, it was suggested that we believe that Conservative Members are biased against council houses. Any such bias was hotly denied, with shaking of heads and so on, by Conservative Members. I can only say that, with one or two exceptions, Conservative Members may have forgotten the kind of comments that we heard during the last Parliament and that


many of us have heard in the House for 15 or 16 years from Conservative Front and Back Benches about what they called second-class citizens living in council houses. It is perhaps indicative that the hon. Member for Glasgow, Hillhead (Mr. Galbraith) has decided to take himself from our deliberations lest he be reminded of some of the things that he has said from both Front and Back Benches.

Mr. William Hamilton: My right hon. Friend will remember that Lady Tweedsmuir spoke of shiftless council tenants.

Mr. MacKenzie: We remember those and many other comments from Conservatives. That is why we were puzzled by the shaking of heads a few moments ago.
I have no doubt that when the Minister replies to the debate he will talk about priorities. It is right and proper that he should do so. There must be priorities in public spending. But I am concerned that the cuts that we have experienced reflect an anti-council house bias on the part of the Conservatives and have been far too heavy.
I have one main priority. I believe that the first priority in Government spending should be to industry and for industrial regeneration. Without the creation of wealth, we cannot have the social services that are essential for the improvement of the quality of life. I shall not say from this or from any other Bench that housing should have greater priority than education, or education than health. All of those services are important. But far less is being spent on all of them than should be spent, and that worries me a great deal.
At my surgery, and in my constituency generally, people tell me that they need new or modernised houses, and that joiners, slaters and plasterers are unemployed, brickworks are being closed and timber merchants are going into liquidation. They ask why the essential needs of those groups cannot be met and the necessary houses built at the same time. If one tries to talk about resources—that is the great word these days—they refer to the money pouring into the Treasury from North Sea gas and oil. They cannot understand why the Government choose to spend that money on unemployment benefit when jobs and homes could be provided with it at one and the same time.
The Minister may regard that as a simplistic argument. It comes from fairly simple and untutored minds. But if we listened to the thoughts of the simpler and sometimes more sensible minds, we might get much further along the road than we are at present.
The second argument that is put to me by my constituents was mentioned by my hon. Friend the Member for Provan. It relates to the kind of comment made by the Under-Secretary of State at Question Time last week, namely, that, as there are X thousand empty houses in Scotland and X thousand homes are needed, a housing problem does not exist. First, I do not accept that the equation works out as neatly as the Minister implied. Even if one accepted his arithmetic—and I do not—in my constituency and, I believe, in other constituencies in the West of Scotland, there is a massive shortage of desirable houses. As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) pointed out at Question Time last week, there is a shortage of the kind of houses that our people want, both in Glasgow and in the West of Scotland generally. I know that from my surgeries.
I became a councillor on the Glasgow corporation in 1952. At that time, 30 or 40 people would come to my

surgery saying that they were waiting for any kind of house. As my hon. Friend the Member for Provan will remember from our experience with Glasgow corporation, those people did not receive an offer until their names had been on the list for six or seven years. It is true that we built houses like billy-o thereafter, although I am not sure that we built the right kind of houses. I take my full share of responsibility for that. I am not sure that I should have gone as far as I did, as a member of the planning committee, in authorising multi-storey housing, but we did so because there was a clamant need at the time.
At my surgeries now, people come to me about questions of transfer or complaining about the need for modernisation, rewiring and so on. Another group is that of young homeless people who refuse to accept the offer of a council house in certain schemes in the area. Frankly, I do not blame them, because there are schemes in my constituency and elsewhere where I would not live. There must be scores of council schemes throughout the West of Scotland in such need of modernisation that young people simply refuse to take the houses. Despite the facts that local authorities and tenants' associations have been doing what they can to improve them, certain schemes in Glasgow have a bad image and people will not take houses in them if they can possibly avoid it. I do not know what we can do about housing schemes of that kind—whether we should take a bulldozer to them—but we ought to apply our minds to the question.
I return to the point that the Under-Secretary of State made last week about the equation. If housing policy is to be based upon that concept, we are bound to encounter difficulties. The best way in which to construct a housing policy is to ask people what they want. Our young people still want to have a house with a little space where they can bring up their children. Our older people still want to live in the inner cities where they were born and brought up, either in purpose-built houses with warden care or in rehabilitated houses.
Glasgow district council—particularly in the east end of Glasgow—is to be congratulated on the houses that it is building for old people, in the GEAR area. Those houses are a credit to the city. The more of them that we can have, the better. I have, however, to introduce one note of discord. I do not think that it is right to offer to our older citizens the one-roomed houses that many of them are being offered. It is a foolish policy. Many older people who live in three-apartment houses would willingly move, making a three-apartment house available for a small family, if they could be given a bedroom and a living room instead of being offered only one-room flats.
Many of those older people—and many Labour Members—were born and brought up in what we call "single ends", and it is their desire and great ambition to get out of them. Towards the end of their lives, when they should be having something better, it is hard on them to be offered only a single end, albeit with a bathroom.
People also believe that greater encouragement should be given to programmes for the rehabilitation of houses. I am not particularly concerned whether that is done by the local authorities or by the housing associations, but such programmes should be encouraged. There are good social and economic reasons for doing so. We have a stock of houses that I would place in the twilight category, and it is essential to maintain them in good order.
The local authorities have a very good reputation, and much credit should be given to the housing associations.


Indeed, the Under-Secretary of State paid tribute to them last week when he opened the exhibition of housing associations. He referred to the vigorous way in which they are tackling the problem. In my constituency, the biggest meeting that we have had in many years was when a housing association put forward proposals for the rehabilitation of older houses within the Rutherglen and Cambuslang area.
There is also a need to modernise the existing stock of local authority houses. I am talking not merely about prewar houses but about houses that have been built since 1945. Those houses are now up to 36 years old. They are good houses, but they are in great need of modernisation, and the resources are needed to carry it out. Month after month I receive complaints from councillors and from tenants that, for example, a programme of rewiring has had to be postponed for yet another year because the Government are not providing the local authority with the money with which to do the job.
The housing policy that is required in Scotland is much more comprehensive than the policy put forward by the Secretary of State in the course of the last two years. He has merely introduced a measure to allow for the sale of council houses. That does not improve the stock of houses. It does not improve the quality of houses. Until he constructs a much more sensible policy, I am sure that the popularity of this Government will continue to fall, even below the poll figure of 15 per cent. at which it now stands.

Mr. Bill Walker: I am delighted to be given the opportunity to speak in this important debate. So many people in Scotland live in council houses that it is right and proper that we at Westminster should discuss their housing problems. They will be pleased to know that, as a result of the endeavours of the hon. Member for Glasgow, Provan (Mr. Brown), we have the opportunity to do so.
I congratulate the hon. Member for Provan on his birthday today. He has introduced the topic in his usual thoughtful and respectable way. The way in which he speaks reflects his genuine concern. None of us is ever left in any doubt that it is genuine. I sometimes feel that other Labour Members are not quite as thoughtful and respectful and are, therefore, not always thought to be as genuine as the hon. Member for Provan.
The hon. Member brought to the debate, as he always does, his special knowledge and experience of council housing. It ought not to be ignored, for it is of great value to the House.
The right hon. Member for Rutherglen (Mr. MacKenzie) said that the best policy for electors wanting a council house in Scotland was to vote Labour. But for what kind of houses? Do they really want houses in soulless housing estates, in schemes where no one will want to live in a few years' time? Unfortunately, many Labour administrations have produced such housing schemes. They have also built houses that were so unsuitable that today, after less than a respectable lifetime, they are near-slums, and that is not good investment.
One housing scheme in Glasgow had to be demolished before anyone went to live in it. The houses were never occupied. Is that the kind of message that is given to the

electors? I doubt it. But that is the reality; that is what has taken place. Properties were built without thought being given to the human beings who would be living in them, or to their needs.
Behind the Government's new housing policy is the recognition that we are not talking about so many bodies going into so many dwellings. We are talking of real people with real needs, people whose children want proper community facilities, and who do not want their children to grow up in areas which will be vandalised.
I take great exception to the remark of the right hon. Member for Rutherglen that Conservative Members regard council house occupiers as second-class citizens. I have never felt myself to be a second-class citizen. Those who live in council estates and who support Conservative Party policies would take great exception to the right hon. Member's remark.
When the Government took office, they had to deal with the housing position then existing, and develop policies accordingly. We had to take account of the economic situation that we inherited—rising inflation, a national debt of frightening proportions, a world recession and increasing unemployment—in determining our priorities on housing. It is against that background that we must examine the Government's policies.
The hon. Member for Glasgow, Garscadden (Mr. Dewar) nods. It is no use saying "We would wish it to be different; we would wish that we had taken over in different circumstances". Of course we would, but we took over in the circumstances then existing.
It was against that background that the Government introduced policies to make the best possible use of the limited available resources. They had to encourage the building of houses for those with special needs—the elderly and the infirm. Instead of a massive policy of merely building houses, the Government had to concentrate resources on areas of greatest need.
We also had to take account of the imbalance between those living in privately-owned dwellings and those living in council houses. Scotland had the worst privately-owned sector of anywhere in Europe. Therefore, the Government wisely decided that the most effective way to deal with this problem in the short, medium and long term was to implement a policy of encouraging council house tenants to buy their homes. No one would force them to buy. They would have the option to carry on as before if they wished. No one would change that. There would be no pressure. They would be given the option, as of right, to buy.
My father, who paid rent and rates on his council house for 40 years, would have welcomed the opportunity immediately after the war to buy his council house, but he was not given that opportunity. Sadly, he did not live long enough to take up the option that is now on offer.
The hon. Member for Provan raised the important point about damp houses. When referring to council properties, one cannot avoid discussing dampness. It is a serious problem in many post-war properties. Part of the problem is that there has been a complete change in the way that people cook, and in the facilities in their homes. The answer to the problem is both education and building.
Warm air can retain more moisture than cold air. Scotland's climate can undergo dramatic changes in temperature within a few hours. A room can be made warm and humid by cooking and by the use of washing


machines or tumbler dryers. These modern appliances have come into use during the last 20 years and are responsible in part for many of the problems of dampness.
The hon. Member for Aberdeen, North (Mr. Hughes) shakes his head. I am sorry to see that, because I am making a constructive, helpful contribution which is based not on supposition but on fact. It is a fact that warm air holds more moisture than cold air. Tumble dryers and washing machines emit water vapour. If the air is warm, it will hold that moisture. The air will move around the house and, if it comes into contact with a cold window, it will condense. That is technically what happens. I used to teach meteorology, so I know the properties of air.

Mr. Robert Hughes: The hon. Gentleman is an expert on hot air.

Mr. Walker: We get a lot of hot air. The problem is not only of construction, but of education. We must encourage people to open windows to get a balanced flow of air to minimise the problem.
There is a need properly to insulate walls. Many postwar houses are inadequately insulated. The result is that the internal walls take much of the temperature of the external walls. If an internal wall is cooler than the air in the room, inevitable there will be condensation. Architects employed by local authorities, planners and councillors are responsible for this problem, because they authorise the construction of unsuitable houses.
Another element of Government policy is to give tenants the right to buy their homes. I have lived in a council property in Dundee under differing administrations—initially Liberal followed by Labour. The attitudes of the managing departments of council properties changed. From being sympathetic and understanding, they became autocratic. Those autocratic authorities began to tell people what they could and could not do. The city now has an authority which refuses to accept that council rents should be increased to a sensible level which the nation and city can afford.
I declare an interest because I have constituents living within the Dundee district. They face massive rate increases because the local authority has refused to acknowledge the facts of life. These people are living next to other constituents of mine in the Perth and Kinross district. There an enlightened administration recognises that council rents should be raised to a level which people in work can afford and which would enable those who are out of work or on low incomes to receive substantial assistance from the central Government. More than 50 per cent. obtain such assistance. Perth and Kinross district has obtained the maximum financial support from the Government, whereas Dundee has not. The difference lies in the fact that one authority has put up rents to those who can afford to pay, and those who cannot afford the rents get Government assistance. Indirectly, that is one way for a local authority to get central Government assistance.
The Labour-controlled Dundee district council has been following for some time a policy of buying votes from those who can afford to pay realistic rents. It is permitting such people to pay lower rents in order to get their votes.
The hon. Member for Garscadden shakes his head. However, that is the position in Dundee. If the hon. Gentleman does not believe it, he should go there to see the dreadful things that are going on there. Sadly, they do not reflect credit on local government. That is sad, because Dundee has a long history of good Labour politicians.

Mr. Robert Hughes: The hon. Gentleman must be joking.

Mr. Walker: I am talking not about those who were charged and finally convicted, but about the many others who, immediately after the war, were caring local politicians. Sadly, they have been replaced either by those who finally broke the law and were charged and convicted or by the present lot who are so far to the Left that they would be more at home in Russia or somewhere east of the Iron Curtain.
That is the backcloth against which the Government's policy has to be determined. The good, respectable and responsible authorities have to be protected from the irresponsible authorities. That is why the other aspect of Government policy must be acknowledged. The Government had no choice. They had to introduce policies that would deal with wayward authorities, such as Dundee district council. The majority of ratepayers on Tayside welcomed that.

Mr. Robert Hughes: The hon. Gentleman strains our patience. The statute book has always contained the power for Governments to deal with local authorities that do not carry out their statutory responsibilities. However, that power has seldom been used, although it was used for a while in the 1950s and 1960s.

Mr. Walker: Sadly, it was necessary to protect the majority of people from irresponsible authorities such as Dundee district council. That is why the Government had to introduce such legislation, and that is why they had to bring forward policies to deal with wayward authorities.

Mr. Robert Hughes: What legislation?

Mr. Walker: I am referring to the legislation to deal with those local authorities that decide to implement policies on housing that refuse to accept that rents should be increased or that council houses should be sold.

Mr. Robert Hughes: What legislation has been introduced to deal with that problem?

Mr. Walker: If the hon. Gentleman does not know, I can suggest only that he is wasting his time as Chairman of the Select Committee on Scottish Affairs.

Mr. Dewar: I think that the hon. Gentleman must be thinking of clause 13 of the Local Government (Miscellaneous Provisions) (Scotland) Bill. No doubt he will remember that the Minister made it clear that housing expenditure would not be taken into account when calculating whether expenditure was reasonable or excessive.

Mr. Walker: That Bill impinges on other aspects of the issues, which are indirectly related to housing. However, I was not referring to that. That Bill must be seen in conjunction with the Government's policy on housing. Housing cannot be taken in isolation, as I said at the beginning of my speech.

Mr. Robert Hughes: What legislation?

Mr. Walker: The legislation that I have named is linked to the overall policy. If the hon. Gentleman does not believe that, he must still be wasting his time as Chairman of the Select Committee.

Mr. Rifkind: I think that my hon. Friend probably has in mind the procedures under the Tenants Rights' Etc.


(Scotland) Act which enable a tenant to go to the Lands Tribunal if the local authority fails to comply with its statutory obligations.

Mr. Walker: I thank my hon. Friend for coming to my assistance.
Government policies must be seen as a whole and not in isolation. I have tried to make it clear that housing is vital to the people of Scotland, but that it cannot be seen in isolation. It must be seen against policies that seek to make people more mobile. If individuals buy their properties, that will serve as a positive contribution towards reducing vandalism. Those are the aspects to which I was referring in the legislation that has been brought forward.
It is not a question of money alone. We are as determined as Opposition Members to find the balance that will lead to improved conditions in council estates. It is also a question of finding the right balance as regards amenities, responsibility and accountability. The measures that the Government have introduced and the sale of council properties will help towards that end. As I said at the beginning, the Government's policies must be seen as a total package.

Several Hon. Members: rose——

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. This is a short debate on a Private Member's motion. I hope that hon. Members will restrain themselves so that all those who wish to speak can do so.

Mr. William Hamilton: Hon. Members will recall that a few days ago the Prime Minister spoke to the rapidly dwindling number of Tory Party faithful in Perth, in the constituency of the hon. Member for Perth and East Perthshire (Mr. Walker). However, the hon. Gentleman was not invited to dinner in his own constituency. In the course of her speech, the right hon. Lady said:
Two years ago we inherited a nation wracked by domestic strife … We have restored rewards for effort and achievement.
If one was to ask how, the answer must be by increasing taxation, by putting about 300,000 people on the dole in Scotland and by putting about 3 million on the dole in the whole of the United Kingdom. The right hon. Lady then said that a few new jobs had been created in Scotland since she came to power. She said:
Jobs which help to pay for better living standards, and better services for all our people, in the years to come.
It is to be jam tomorrow.
The Prime Minister referred in scathing terms to the extravagance of Labour-controlled regional and district councils. Indeed, the hon. Member for Perth and East Perthshire and other hon. Members have also done that. The right hon. Lady made only one mention of housing. She said that in two years 25,000 families had opted to buy their council houses. I should like the Minister to tell us where those figures came from. On 18 March, in reply to a question from me, the Minister said that from 1 April 1979 to 31 December 1980, 3,402 council houses had been sold. That is a tiny proportion of the total number of council houses in Scotland.
The Minister broke down the figures. He said that 32 council houses had been sold in the Borders, 63 in the

Highlands, 562 in the Lothian region, 1,292 in Strathclyde, 357 in Tayside, 618 in Fife, and 47 in the city of Aberdeen. I do not know where the hon. Member for Aberdeen, South (Mr. Sproat) got his figures from. He gave the figure of 300 for Aberdeen. According to the Minister's reply, the official figure is 47.
If the policy is successful, what contribution will it make towards solving Scotland's housing problems? Those problems were outlined in the well-argued pamphlet from Shelter and from the Scottish local authorities special housing group. The answer must be "None". That is why almost every local authority in Scotland opposed the policy. I agree with my right hon. Friend the Member for Rutherglen (Mr. MacKenzie) in that, in principle, I do not oppose a person wishing to buy his house. However, we object to an unwilling seller being compelled to sell.
Local authorities build council houses with their own and with the taxpayers' money. However, they have now been directed by the Government to sell them at knockdown prices. Moreover, if the buyer cannot raise the money, local authorities are being compelled to provide mortages. That is an intolerable form of dictatorship by the central Government. Virtually all Scottish local authorities oppose such policies for reasons that they have advanced and that were discussed during our proceedings on the legislation last Session.

Mr. Russell Johnston: The hon. Member for Fife, Central (Mr. Hamilton) said that in principle he does not object to people buying their own houses. It is not right to over-concentrate on that area because the people who buy their own council houses are already in occupation. The problem is caused by people who are not in occupation.

Mr. Hamilton: I shall not labour the point because we have argued it at length. When we come to power at the next election the policy will be overturned. We shall say that tenants have the right to buy so long as the local authority is willing to sell. The local authority knows the local housing problems better than anybody in St. Andrews House. Local authorities must be allowed to decide which houses shall be sold.

Mr. Rifkind: Is the hon. Member for Fife, Central (Mr. Hamilton) telling us official Labour Party policy? He is saying that the next Labour Government will allow any willing local authority to sell council houses to tenants. That was not the last Labour Government's policy, because they refused to give local authorities permission to sell. Is there a new policy?

Mr. Hamilton: I do not presume to speak on behalf of my party officially. I am stating what I hope that the policy will be. I hope—and think—that the policy will be to overturn the present policy in favour of one which allows tenants to buy their houses so long as the seller is willing. That seems to be fair. The freedom of local authorities is a selective principle on which the Government act or not. When the Secretary of State was approached about the problems of condensation and dampness, he said that local authorities had the freedom to determine their own priorities within available resources. The Secretary of State wants to give local authorities freedom to carry the can for dampness and condensation but he will not allow them freedom to decide what they should do about their stocks of council houses.
The Government's latest expenditure White Paper shows that expenditure on Scottish housing at 1980 survey prices has been slashed by more than 40 per cent.—the biggest of all cuts in public expenditure in Scotland. That reveals the Government's housing priorities. By whatever yardstick it is measured, the Government's housing policy in Scotland has been and is one of gross criminal negligence compounded by a breathtaking complacency and insensitivity. Rents have rocketed and house building has plummeted directly as a result of Government policies.
The Shelter report says that fewer houses were being built and that fewer will be built in the years to come while at the same time 150,000 people are on housing waiting lists. When those people are begging and waiting for years for houses, one in four building workers in Scotland is on the dole. That position is becoming worse.
There is a pent-up demand for houses and yet there are lengthening dole queues of housebuilders. What a nonsense and obscenity it is. In February this year 47,579 unemployed building workers were registered as unemployed at a cost of £6,000 a head. That means that £285 million a year is being paid by the taxpayer to pay dole when those men could be put to work to build the houses that so many people want. That does not make sense. It is the economics of Bedlam. That is why the Prime Minister is pelted with eggs each time she goes to Scotland. That is why the Tory Party has only 15 per cent. support in Scotland—the lowest in history.
One need look no further for a reason than to the Government's housing record. Shelter has done a great public service in spelling it out. When the next public opinion polls are published, support for the Government will be even less. The more that the Prime Minster comes to Scotland the less support she will command. She is the most despised woman throughout the length and breadth of Scotland.

Mr. Allan Stewart: It is always a pleasure to follow the hon. Member for Fife, Central (Mr. Hamilton). He was confused by the figures and the difference between sales and applications. About 1,500 sales have gone through and there are about 18,000 applications. The hon. Gentleman made many interesting remarks. It is a pity that his speech was heard by so few Scottish Labour Members. Where are the other 40 Scottish Labour Members? I accept that hon. Members have other commitments, but this is an exceedingly important subject. I congratulate the hon. Member for Glasgow, Provan (Mr. Brown) on his reasonable speech. However, he was speaking to more Conservative Back Benchers than Labour Back Benchers. That is a disgrace. It is an insult to the hon. Member for Provan and to everyone who is interested in housing in Scotland.

Mr. Dewar: The hon. Gentleman's indignation is entirely spurious unless it is placed in the context of natural expectation based on the record. The Labour Party is much more interested than the Conservative Party in housing in Scotland.

Mr. Stewart: I do not know what the record shows, but I urge the hon. Member for Glasgow, Garscadden (Mr. Dewar) to scan the Benches and to count. With the arrival of the hon. Members for Aberdeen, North (Mr. Hughes) and Glasgow, Cathcart (Mr. Maxton) the ratio is changing a little. Now only 38 Scottish Labour Members are absent.
The hon. Member for Provan sounded almost defensive about his Green Paper. The end of paragraph 1.2 states:
Housing policies have come to a turning point and are due for reappraisal. They should be aligned more closely with housing needs, whether these take the form of recognised deficiencies in existing housing or aspirations for which people are willing and able to pay.
I hope that the hon. Gentleman will not accuse me of quoting that out of context. I agree that Scottish housing has reached a turning point. There is a crude surplus of 190,000 of houses over households. That has been so since 1977.

Mr. Maxton: Can the hon. Gentleman break down the figures between private and public sector houses which are empty?

Mr. Stewart: I believe that the gross surplus of houses in the public sector is 35,000. There is a crude surplus, which changes the whole context in which we have to develop housing policy. It means that housing policy is concerned not with an overall problem but with the limited problem of distribution allocation and quality, and meeting the individual housing needs of families.
In an interesting contribution the right hon. Member for Rutherglen (Mr. MacKenzie) asked what should he done about schemes that have been built but which are almost unrentable. The right hon. Gentleman referred to schemes in his constituency and elsewhere to which people will not move.
One answer may have been found by Edinburgh district council in an interesting experience at Martello Court which I commend to Opposition Members who do not believe in the market. A tower block was virtually unrentable and demolition was considered. However, the district council decided to sell the block to a private developer under a complicated profit-sharing arrangement. The developer sold the individual flats in the block. He ensured against vandalism through various security precautions. Every flat has been sold—most of them, I understand, to people on council waiting lists. We should hear less from Opposition Members about the inability of the market to work in Scottish housing.
I should like to mention one matter in which I declare an interest as a Glasgow ratepayer. I hope that the Minister will make some remarks about the housing repair account of Glasgow district council. Conservatives were warning last November about overspending on Glasgow repairs. The budget in January entered into an overspend of £6·35 million. I understand that the overspend now amounts to £7·9 million. These are large amounts. It is no answer for the Labour group running Glasgow district council to blame officials. Those serving in the Labour group are in charge. They are the elected representatives. The overspend in Glasgow is a matter of major concern.
I should now like to turn to council house sales, especially in my constituency, where Renfrew district council, although not refusing to implement the Act, is making its operation very difficult. I should like to mention some points that concern my constituents. The first is the variation in valuations of adjoining and apparently identical houses given by the district valuer and by a private valuer employed by the council. The private valuations, according to my constituents, are consistently £1,000 to £1,500 above those of the independent distract valuer. That is obviously a matter of some concern. Any advice that the Minister can give would be welcome.
A second concern is Renfrew district council's standard form of offer that allows the introduction of new title conditions after an offer has been accepted and before the title is granted. Purchasers are buying a pig in a poke in regard to title conditions that are subsequently attached before the deal is completed. These include such conditions as that the new house owner shall not have more than one pet in the household and that he will always consult the district council before repainting the outside of his new home. These conditions are clearly not reasonable. No doubt, the Lands Tribunal will reach a conclusion.
A further concern is the failure of Renfrew district council and other authorities to exercise any discretion under section 1(12)(iii) of the Tenants' Rights, Etc. (Scotland) Act 1980 of the position of a daughter who has looked after her parents for a period. The parents die and the local authority has a discretion to make some allowance in calculation of discount. No allowance is made by Renfrew district council. I hope that my hon. Friend can give some assurance that the Government will examine the matter.
Constituents who wish to buy their own homes have expressed to me their fear of renationalisation without compensation. They are worried that a future Left-wing Labour Government will say in 1984 or 1985 that they intend compulsorily to repurchase their homes at the price paid for them in 1981. That fear is actively encouraged by local Labour politicians. I understand that a motion to a Labour conference from one district council is along those lines. I have pointed out to my constituents that the Opposition Front Bench has never suggested that this would be future Labour policy. I hope, however, that we shall hear what future Labour policy is.
The reaction of my constituents is that the right hon. Member for Glasgow, Craigton (Mr. Millan) or the hon. Member for Garscadden will not be in charge. More will be adopting that approach following the ASTMS vote. There is a fear that a future Labour Government may contain the hon. Member for Dundee, West (Mr. Ross) as Secretary of State with the hon. Members for Kilmarnock (Mr. McKelvey) and for Cathcart as Under-Secretaries, and the hon. Member for Edinburgh, Leith (Mr. Brown) as Solicitor-General for Scotland.

Mr. John MacKay: The situation is surely much more worrying for my hon. Friend's constituents than he has described. Those constituents who read the Sunday Standard yesterday will have seen that a Labour-controlled Scotland would not be in the hands of anyone elected. The back room mafia of the Labour Party would control affairs.

Mr. Stewart: My hon. Friend is right. The article was headed "Today Dundee, tomorrow the world". Dundee is clearly run by someone who has never been elected by a popular vote. That is the way things are going. I do not believe that there is any chance of a Labour Government in the foreseeable future. My constituents, however, do not necessarily share my faith in the electoral process. There is a genuine worry about the intentions of a future Labour Government. All the evidence in my constituency, including Barrhead, which is not yet Conservative, is that the Government's policy is highly successful and will become increasingly successful as people recognise the

benefits. Once the snowball starts rolling, it will get bigger. I believe that it will revolutionise the social and economic environment of West Central Scotland and the rest of the country.

Mr. Russell Johnston: I shall deal later in my speech with some of the limited points made by the hon. Member for Renfrewshire, East (Mr. Stewart) in his rumbustious fashion. I should like first to congratulate the hon. Member for Glasgow, Provan (Mr. Brown) on initiating this debate. I am also pleased to wish him many happy returns on his birthday.

Mr. Maxton: Which one?

Mr. Johnston: I expect that the hon. Gentleman is somewhat ahead of my good self.

Mr. Maxton: He does not look his age.

Mr. Johnston: Whether or not he looks it is hardly relevant. I regret to say, however, that the hon. Gentleman may have a point.
I have a high regard for the hon. Member for Provan, especially for the diligence, open-mindedness and fairness that he exhibited as a junior Minister in the Labour Government. This is a good opportunity to say that he is the best junior Minister with whom I, as a Back Bencher, have dealt in any Government throughout my membership of the House.
It is, therefore, unfortunate that in my necessarily brief remarks I have to remind the House that the majority of the difficulties that we face in Scottish housing stem directly from decisions taken by the Chancellor of the Exchequer in the Labour Government of 1975, the right hon. Member for Leeds, East (Mr. Healey), who made the most savage cuts, up to that time, in the resources available for Scottish housing. He reversed the general trend of housing expenditure to rise, which applied even under the Conservative Government of 1970–74. Apart from the brief, unsuccessful and unconvincing boost that took place shortly before the general election in 1979, that reverse has continued unabated.
Labour Members are justified in pointing out that the number of starts last year was the lowest peace-time figure since the 1920s, but the fall in starts since 1979 has been far lower—indeed, minimal—compared with the falls between 1974 and 1979. In that period housing starts per annum fell by almost two-thirds, and it is right that that should be mentioned.
There is no way in which I can sketch a whole housing policy in 10 or 12 minutes. For example, I shall not even touch on the important question of rents. I shall try to analyse the availability of housing from the view of a person in need. It must be a superficial analysis, but it is the basis on which all recent Governments have stated that there they were proceeding.
However, I wish first to put four bald questions to the Minister. First, given that the housing stock in quantity, quality and type, balanced against need—a point taken up by the hon. Member for Renfrewshire, East—is spread unevenly throughout Scotland, what consideration are the Government giving to discussions with authorities that have special problems, with a view to providing special grants outside the general housing support framework?
We have a total surplus of stock, but that is not true everywhere. What do the Government propose to do to get


round that problem? In my constituency the Inverness district council has a waiting list of 1,800 and next year will build only 60 houses. The Minister has said from time to time that waiting lists are exaggerated because not everyone on them is in excessive need. I accept that, but I do not believe that a waiting list of 1,800 is really a list of only 60. Neither my postbag nor the people who come to see me reflect that.
I have been in correspondence with the Minister about the problems of Badenoch and Strathspey. Skye and Lochalsh faces equal difficulties, and in the constituency of my right hon. Friend the Member for Roxburgh, Selkirk and Peebles (Mr. Steel), who is sitting beside me, the Minister has refused the Scottish Special Housing Association permission to build houses at Kelso on the ground that houses are available in Hawick, which is only 18 miles away. That is not good enough.
Secondly, most people would agree that sheltered housing, whether for the old or the disabled, is particularly necessary in many places. Do the Government accept that such housing requires a special push, which means, I suppose, special money? I have told the Minister in correspondence that the drop in support to housing associations, through the Housing Corporation, has seriously affected work in that sector.
Thirdly, reference has been made to the Scottish local authorities' special housing group survey on heating and energy conservation. The hon. Member for Glasgow, Kelvingrove (Mr. Carmichael) asked a question on that subject during Scottish Question Time last Wednesday. It is a clear instance where social need and the national imperative for energy conservation come together. I repeat my view that 90 per cent. insulation grants for old-age pensioners are useless, because the pensioners do not have the extra 10 per cent. Has the Minister any proposals in mind?
My fourth question concerns general modernisation, including dampness. The point was well developed by the hon. Member for Provan. It is a serious problem, not only in the cities but in rural areas such as Galashiels. Have the Government any concrete proposals in that area?
Returning to the broad question of need, what does someone who falls within the classification of the homeless persons Act do? He, or more likely she, will probably be unemployed or a low wage earner. The hon. Member for Aberdeen, South (Mr. Sproat), who has temporarily left us, said that he did not know what I meant when I intervened on the question of choice. I meant that one can have a choice if one has enough money. If one does not have the money, one does not have the choice. Owner-occupancy is out. I support owner-occupancy, but it must be noted that housing starts by private builders are down. The hon. Member for Perth and East Perthshire (Mr. Walker), who was engaged in that area, will agree with me.
I also support council house sales with, as I said when the relevant Bill was going through, safeguards in areas of shortage or in the special conditions operating in rural areas. But, again, that option is not open to the homeless. It is open only to those who are already housed. That is why I intervened in an earlier speech to point out that only those already in council houses can purchase them.
Incidentally, I do not complain about the uncharacteristic interference of the Government in the market system by their mandatory discount system, because, although it

is arbitrary, it is a way of spreading wealth and ownership. Although it is arbitrary it is a good idea, but it is no help to the homeless.
The homeless lady might approach a housing association, a number of which have catered specifically for battered wives, one-parent families and so on. In Glasgow and the west of Scotland particularly, the associations have done a tremendous rehabilitation job. But cash limits are forcing them to grind to a halt. The Minister knows that that is true and he has met delegations that have told him just that.
The SHHA, the Government's only direct contribution to the alleviation of housing need, has had to cut direly needed modernisation schemes—for example, in Hilton in my constituency—or in Aberdeen, where demand its high, abandon one of its best sites.
The homeless person might look for a private flat. That is an area about which we need to think again. Well-intended legislation for which I voted in the 1960s has had the unintended effect of destroying that market. It is now not available; people are frightened to let flats. It is a matter that we should rethink.
So the homeless person ends up with the local authority. Frankly, many people dread going there, because they are often coldly and unsympathetically treated. Officials who have job security and excellent NALGO-secured wages can sometimes be arrogant and uncaring. I am making not a general but a particular criticism, because it can be made of particular cases. It is worth reminding people in public service that public service means just that.
Let us assume that the homeless person approaches a local authority that has a good record. Incidentally, I am not at all satisfied that the code of guidance introduced by the Minister has been equally applied by all local authorities. The person—frequently a woman with children, who has left her husband after domestic violence—will be given a house that is difficult to let, because that is the only house that is available. As a result, she may be dragged down into a cycle of poverty and antisocial behaviour.
I do not want to make a party political point, but it should go on record that this measure of municipal assistance springs not directly from either this Government or the Labour Government but from a Liberal Private Member's Act introduced by my hon. Friend the Member for Isle of Wight (Mr. Ross). Liberal local council members in Scotland have criticised the Act, and I realise that a lack of housing and social work support often result in even that limited act of enforced charity being open to criticism and dispute because of its effect on good tenants and on the general queue.
I often deal with couples who are so far childless, waiting for a house before having a baby. They say to me, quite reasonably, "Why must we give way to those who have children, irrespective of resources?" That is my experience, and perhaps it is the experience of other hon. Members. It is a difficult question to answer.
However, there are plus points. Thanks to the Tenants' Rights Etc. (Scotland) Act, allocation schemes must now be published. That is quite right, although I am told that not all local authorities have yet done so. I shall be obliged if the Minister can let us know before the end of the debate which authorities have not done so. Thus, an applicant for a house now has some idea why he or she has been refused. That is a good thing.
Equally, the Labour Government's system of housing plans has probably made local authorities think harder and longer about the concept of housing need than they previously did.
However, a person in real need would probably dismiss many of these reforms as small compared with the massive downward movement in resources available for housing. That is a fact, and it has spanned the past six years. The Government's policies in some respects—not all—are rather horrifying, but an objective observer would recognise that the trend was started most emphatically by the Labour Government, who cannot escape responsibility for some of today's tragedies.

Mr. Peter Fraser: The hon. Member for Glasgow, Provan (Mr. Brown) is, to say the least, coy about acknowledging his authorship of the 1977 Green Paper, "Scottish Housing". Possibly that is because, whenever it is mentioned, it tends to provoke an eruption from the hon. Member for Central Ayrshire (Mr. Lambie). However, in the absence of that hon. Member, I intend to refer to it.
There is agreement in the Conservative Party—although there may be matters of disagreement within it, as a matter of analysis, of what the problem is and how different approaches may be taken towards the resolution of the difficulties—that the Green Paper is a valuable document. On page 3, it says:
The state of Scottish housing today is a tribute to past achievement. The absolute shortage of housing which has dominated housing policy in the past has been eliminated in most cases and housing conditions are vastly improved. A higher proportion of Scottish households than in the rest of Europe now have the use of basic amenities. But housing problems remain".
The Green Paper goes on to say that the problems are "more localised and varied".
The same point is made in the document recently produced by Shelter entitled "Dead End Street". It says on page 2:
Scotland's record in dealing with slum housing is, at first sight, impressive. As a result, Scotland's housing is more modern, and better provided with the basic amenities, than that in the rest of Britain. But past achievements should not blind us to the considerable problems remaining.
If the purpose of the hon. Member for Provan in moving this motion is to look specifically at the new problems that are emerging or at the remaining problems that require to be resolved, I commend it. But I regret that in our debate so far, at least in part, rather than attempting to isolate the specific problems of housing in Scotland, we have dragged endlessly through the same old routine of the number of new housing starts, the length of waiting lists, and so on. That tells us nothing about the real problem.
I come back to the Green Paper, "Scottish Housing". As was said in 1977, if we had continued to build the same number of new houses as were being built at that time, one of the absurd conclusions that we should have reached would have been to match the needs with the number of houses; as a result, we should have demolished about 230,000 houses that were above the statutory tolerable standard. That line of approach should have been abandoned long ago—certainly since 1977.
Then, regrettably, the hon. Member for Fife, Central (Mr. Hamilton) continued to make great play of the length of waiting lists. He knows that one of the substantial

changes introduced in the tenants' charter in the Tenants' Rights, Etc. (Scotland) Act is the whole basis of getting on to a waiting list. Now a person can be on more than one waiting list. There may be a number of reasons why a person wishes to be on a waiting list and be included on that waiting list while he or she is still adequately housed—the person may wish to move, for instance, to be nearer the family. It will not do simply to look at the crude statistics of the housing waiting lists. That does not show the true nature or extent of the problem. It is regrettable, therefore, that our debate has concentrated so much on those apparent manifestations of the problem.
We should concentrate on those aspects of housing where there are special needs and special problems. Both the hon. Member for Provan and my hon. Friend the Member for Perth and East Perthshire (Mr. Walker) concentrated on the problem of dampness.
That is a real problem and one that requires continued examination and effort. I do not intend to deal with that matter. Nor do I intend to deal specifically with the special needs category of housing for the elderly. However, I want to emphasise one point.
In talking about housing for the elderly, we are not simply talking about sheltered housing. Many elderly people want housing that is suitable for their needs but that is not so expensive or so specifically designed as to come into the category of sheltered housing. They want smaller houses which are adequate for their needs and which will allow them to budget properly for heating, and so on. They also want that housing close to shops, close to the areas in which they were born and brought up—the point that the right hon. Member for Rutherglen (Mr. MacKenzie) made.
At the same time, at the other end of the age scale there is a requirement for smaller flats for the youngest members of the community. There is an immense social change at home. People are no longer prepared to stay at home until they marry, then to move away and have families of their own. They want to live on their own, and we should recognise that desire.
The problem is that those young people and the elderly to whom I have referred are in competition for exactly the same houses, in exactly the same locations. The younger people want to be in the centre of the towns and burghs because that fits in with their social life, and so do the elderly people. Having identified that problem, should we be examining it specifically and looking to the funding of schemes to overcome it, or should we continue to return to the tired old argument that we should simply pump in ever larger sums without discrimination as to where the resources are allocated? I believe that we should examine that specific problem, seeing not only what money should be allocated to deal with it but what is the most appropriate vehicle for introducing changes.
When I look at those two problems I come to the clear and unequivocal conclusion that the housing association movement, which has been extremely successful in Scotland, is one of the best ways of dealing with them. It is not simply a matter of putting up new houses endlessly on the peripheries of towns. The first need is to provide smaller houses for those whom I have described, and smaller units within rehabilitated tenements and other older buildings.
I think that the hon. Member for Provan would not dissent from that view. In pages 89 and 90 of his Green Paper, he made it clear that the Labour Government of the


time were prepared to come in behind housing associations. The Green Paper said that housing associations in Scotland were
concentrating on the rehabilitation of substandard tenement housing, often bought from private landlords, and on providing new housing for special groups such as the disabled, the elderly and single persons, some of whom have in the past depended on the private rented sector for their housing.
Having made that assertion, it concluded:
No less important, however, is the encouragement of housing associations to replace part of the role of privately rented housing, backed by more flexible and economical arrangements for Government financial assistance.
That is an admirably stated approach, but, whatever other criticism is to be levelled against the present Government over housing in Scotland, the one matter on which they have not cut down is the funding of housing associations.
The hon. Gentleman used one extremely feeble argument when he referred briefly to housing associations. He said that no new ones would be formed in Scotland this year. That may be so, but the hon. Gentleman should have set that statement in the context of the fact that, with 56 district and island councils having responsibility for housing in Scotland, there are now housing associations established in 55.
Moreover, it would have been only fair of the hon. Gentleman to make the point that in 1981–82 the housing associations in Scotland will receive about £73·5 million directly from the Government, through the Housing Corporation. Additional funds may also come to them indirectly through the local authorities. I am not sure what the precise total is, but it is certainly far more in capital terms than they have ever had. In that regard, the Government are to be applauded for their concentration of effort on these matters.
I have in my constituency one excellent housing association, the Angus housing association, which I use to demonstrate the type of housing that it provides and the needs that it meets. It has recently transformed a seventeenth-century house, containing beautiful seventeenth-century panelling. I do not say that housing associations should be in business simply to do that sort of thing, but the right hon. Member for Rutherglen, who was anxious that there should not be single-apartment dwellings, would be interested to see it. A house that had been derelict and rat-ridden for years now comprises eight two-apartment flats in the centre of a town where the inhabitants would otherwise have found no accommodation. As with so many people, their only alternative would have been to move out into one of the peripheral schemes where elderly people, having less access to transport, would be much more remote.
That is one constructive approach that we should be adopting. My hon. Friend the Minister is to be commended on the concentration of effort that he has given to Scottish housing. It is now well past the time for looking at these matters in terms of crude national figures. We should encourage concentration on specific areas and specific organisations in the future.

Mr. Deputy Speaker: Mr. Dewar.

Mr. Gordon Wilson: On a point of order, Mr. Deputy Speaker. If it is the Chair's duty to protect minority interests in the House, is it correct that it should bring this debate to an end by calling the principle speakers, without a representative of one of the main parties in the House being called?

Mr. Deputy Speaker: I am not bringing the debate to an end; I am calling the hon. Member for Glasgow, Garscadden (Mr. Dewar).

Mr. Donald Dewar: I hasten to assure the hon. Member for Dundee, East (Mr. Wilson) that I am doing what in the convention of the House is called "intervening". We may well have an opportunity to hear the hon. Gentleman later. I almost said "to have the pleasure of hearing the hon. Gentleman", but I should leave the phrase neutral until we have heard him.
Whatever may be the Labour Party's housing policy, it will not be written by the hon. Member for Renfrewshire, East (Mr. Stewart). He should try to deny himself the pleasure of starting all sorts of unlikely fears with which to frighten his constituents, which I think was the exercise in which he was indulging.
I was delighted to hear the hon. Gentleman describe Conservative housing policy as a snowball, because a snowball is a contrived and impermanent thing that leaves nothing behind it but a rather wet puddle. That seemed to me to be a suitable metaphor to describe the hon. Gentleman's party's efforts.
I congratulate my learned hon. Friend the Member for Glasgow, Provan (Mr. Brown) on initiating the debate. He has a great deal of constituency experience, and represents a part of Glasgow in some ways analagous to mine. I know how deeply he feels about the problems of his area and how hard he works on them. He also has a knowledge of office, having been a Minister in charge of housing in Scotland. He deploys that experience very effectively, not only in this debate, but in the internal counsels of the Labour Party.
My hon. Friend has invited us to look at the Conservative Government's housing policy. Therefore, my opening remarks are probably the end of the congratulations. They are certainly the end of the social pleasantries. With his right hon. Friend the Secretary of State, the Under-Secretary of State, the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) has presided over a remarkable effort in Scottish housing. His record is memorable; it is also unenviable.
We recently had the Scottish housing figures for the final quarter of 1980, so that we now have the figures for the whole year. By any standards, they make thoroughly depressing reading. The new-build figures are down by 29 per cent. Private sector starts are the lowest for a decade, and public sector starts are the lowest since the war. Local authority tenders for new build accepted in 1980 are down by more than 50 per cent. on the previous year. No matter how much casuistry, how much special pleading there may be, a deplorable and depressing picture emerges.
I recognise that it is a characteristic of advocates that they are professionally involved in defending the indefensible. All that I can say to the hon. Gentleman is that when the electorate sends him back to the tools of his trade he will have kept his skills bright and shiny in attempting to defend what he has done at the Scottish Office. I do him the credit of imagining that he has found it a thoroughly unpleasant task.

Mr. Rifkind: Will the hon. Gentleman instruct me?

Mr. Dewar: I am always interested in charitable works. I believe in the voluntary principle, but the hon. Member should understand that solicitors have a duty to their clients.
In a number of other ways, this has been an interesting debate. We have seen one of the principal Conservative tactics being employed, namely, the diversion. On housing, we do not hear Conservatives talking about resources and the central and essential problems. They develop a nervous compulsion to talk about council house sales. The reason is to be found in the speech of my hon. Friend the Member for Provan, who quoted what the Under-Secretary, addressing the faithful in Perth, made clear—I thought mistakenly—namely, that he could make council house sales into a political winner. That is the equivalent of bread and circuses. He hopes that he will be able to distract attention from the abysmal failure that has become self-evident across the whole of housing policy.
The hon. Member for Aberdeen, South (Mr. Sproat) swings one of the meanest axes in the Tory backwoods. He talked about nothing else. I am sorry that he has deserted the Chamber, but I hope only temporarily. He is noted for his lack of rapport with the realities of life in Scotland and Scottish industry. His contribution—his flight of social fancy—in the debate on the Tenants' Rights, Etc. (Scotland) Bill, suggested that pensioners in Drumchapel in my constituency might like to buy their council houses to make a capital gain to buy retirement cottages in Argyll. If that is his vision of the realities of the Scottish housing scene, we do not need to spend time listening to his views.
I do not think that we should go over the sale of council houses in detail. The party arguments are well known. I remind the hon. Gentlemen that it is no good suggesting on the basis of X thousand or X hundred applications or inquiries which may in future be translated into sales, that the general theory is a consensus in favour of sales of council houses in Scotland. Even as he dreams his dreams, the Under-Secretary will not think that a majority of council house tenants will be able, or will wish, to buy their council houses.
I am not worried about those who have convinced themselves—in many cases probably mistakenly—that it is to their advantage to buy, but I am concerned about the countless hundreds of thousands who are not able to buy and who see the whole idea as divisive and embittering. They see the council house stock, which they would one day like to occupy, being spirited out of the pool and disappearing beyond their grasp. They see it as a traditional Conservative ideal—which is at least consistent—because Conservatives suggest that it may be individually and personally financially advantageous to buy, but that personal advantage will be against a background of policies that are anything but advantageous for the generality of council house tenants and others living in Scotland.
It is a case of "Blessed are those that have, for the Tory Government will give unto them", but for the majority of those living in my constituency the whole thing is a fraud and a disaster.
We should also consider those matters that the Conservatives are anxious not to discuss, such as resources. Many who work in the voluntary housing sector have been besieging hon. Members about the lack of resources. They have included Shelter and Conservative and Labour councillors. Universally we are told that the

problem is one of resources, and resources are not being made available. In a recent written answer to me, figures were given that are extremely worrying. The 1980 survey prices show that in 1980–81 the totality of the housing budget—including current expenditure, capital expenditure, housing associations, new towns, the SSHA; the whole portmanteau of what is spent in Scotland—was £687 million. In 1981–82 that £687 million had melted to £614 million. Next year it will be reduced to £540 million if the Government have their way, and the year after to £460 million. If that is the snowball principle to which the hon. Member for Renfrewshire, East referred, I do not like it at all. It represents a disastrous slide in the Government's commitment to the housing needs of the Scottish people. The Government should stand condemned.

Mr. Myles: Is the hon. Gentleman advocating the lowest common denominator for housing?

Mr. Dewar: If the hon. Gentleman is implying that council houses are the lowest common denominator, I find that offensive. To be fair to him, he is probably not a vindictive man and I do not think that he believes that. That is the logic of Conservative arguments.
If we worry about ghettos and people's perception of public sector housing, the one thing that will overcome those damaging, unjust and unfair ideas is having the sort of "Sale of the Century" that is being organised, or rigged, in Scotland, which will flog off all that is seen as desirable and popular in the public sector. The figures represent disaster for those who are struggling to maintain housing standards, and goodness knows how we need to improve housing standards now. The ABC of what is happening shows that the rate support grant fell from £212 million last year to £140 million. That is 34 per cent. or £100 less per council house. That is probably an over-simplification, but it brings home graphically the reality of what the Under-Secretary has achieved during his tenure of office.
The mechanism of housing support as it has been manipulated by Conservatives is unacceptable. The housing support grant has been squeezed. To that has been added an artificially low rate fund contribution which bears no relation to housing need and leaves an enormous gap which it is demanded should be filled by unreasonable large rent increases.
It is a black farce and an accurate description of what has been happening. To concentrate the minds of local authorities on the need to be beastly to their tenants they are told that if they do not keep to that artificially low rate fund contribution figure their housing capital allowance will be cut.
The hon. Member for Pentlands recently appeared before the Select Committee on Scottish Affairs. I commend to the House the evidence and report of the Select Committee as extremely tidy and useful summaries of how the system works. To be fair to the hon. Member for Pentlands, he made it clear in answer to question No. 121, and a number of other questions, that housing capital allocations should be made on the basis of need. Of course there are difficulties, and there are never sufficient resources to satisfy need, but what there is should be set out on the basis of housing plans and the Government's perception of where the need lies.
The Under-Secretary has retreated from that decent principle. He is saying now that if the local authority in Glasgow does not put up its rents by, let us say, 71 per


cent., and does not make that totally artificial rate fund contribution, no matter what the need or how serious the problems it will be punished by the dominees in Dover House by having its housing capital allowances slashed.
In Scotland we have lost £35 million of what was allocated on the basis of need by the Government because of their ideological inflexibility and their wish to dragoon local authorities into policies that they do not want to follow. For example, in Glasgow in 1979–80 the housing capital allowance was £83 million. It was reduced to £69 million in the following year, and this year it was to be £66 million. Because Glasgow refused to put up its rents by close to 70 per cent. in real terms, that £66 million has been cut to £55 million. That £60 million was inadequate in terms of need in any event and in the first place.
I do not want to go into the hard sell, but anyone who represents a Glasgow constituency—and the experience can be duplicated in Aberdeen, Dundee or any other major conurbation in Scotland—will know of tenants who thought that they were on the rehabilitation list, who are living in houses that were built before the war and who have kitchens with one power point and with wiring systems which are not only inadequate but which they fear, in many cases properly, are actually unsafe. There are also people living in houses which are deteriorating steadily because local government finance is not available to maintain the standards that any civilised society should demand.
There are well over 100,000 houses in Scotland which are below the tolerable standard. There are about 50,000 men at present on the dole whose last jobs were in the construction industry, and they represent more than 25 per cent. of the labour force in the construction industry.
The problem is not one simply of new build. The Minister has a point when he says that there should be a shift of emphasis. If he were to say "It is true that we have almost murdered new starts and new build, but we look at what we have done on the rehabilitation side, look at how we have advanced the programme and look at the way that we have been able to modernise streets that might have had to wait years if we had not rejigged the priorities", I should reply that, whereas house improvements in the public sector were 37,000 last year, they are now down to 24,000. The same sort of miserable collapse is to be seen in rehabilitation as we have seen in new build. Even in the private sector the rate is only half what it was in the mid-1970s.
The Opposition really can bring in a firm verdict of guilty against the Conservative Government and their housing policy over the past two or three years. Conservatives are very fond of business metaphors. Despite their democratic trappings, many Government supporters hanker for the concept of Great Britain Limited. If they were looking at housing in the way that someone in charge of a private company would do, by this time they would be panic striken about the lack of investment and reinvestment in their basic plant. If Conservative policies continue as they are set at present, and as they are advertised in the Government's White Paper, running to 1984, for a lot of properties in Scotland it will be a long straight run to the grave.
The Government are doing immense damage, and local authorities are powerless to put it right. It can be said quite genuinely that in a negative sense it amounts to a form of vandalism. We are watching the steady deterioration of our housing stocks, especially in the great housing

schemes of our heavy industrial areas. Any tenant there, or anyone who is in contact with tenants there, knows the bitterness and frustration to be found as people come daily to the surgeries of their elected Members of Parliament saying "My rent is going up, my rates are going up, but the services being offered me are deteriorating all the time." There is understandable confusion in their minds about who is to blame. In this House, we know. We know that that is the inescapable consequence of Conservative housing policy over the past two years. My hon. Friend the Member for Provan invites us to condemn it. I believe that we are justified in doing so.

The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): As this is a Private Member's motion, I make my intervention at this stage, but that does not mean that it is the end of the debate.

Mr. Robert Hughes: On a point of order. I think that the Minister should wait until all Back Benchers have had the opportunity to speak before replying to the debate. This is an abuse of the private Members' procedure.

Mr. Rifkind: This is not an offical Opposition debate. It is a debate on a private Member's motion. Since the spokesman for the Opposition has intervened in the middle of the debate, it is perfectly in order for a Minister to do likewise.
I begin by congratulating the hon. Member for Glasgow, Provan (Mr. Brown). I mean that genuinely, because many of us recognise that during his tenure as Scotland's housing Minister he made a number of contributions which helped Scotland's housing. It is not just because it is the hon. Gentleman's birthday today that I pay tribute to that fact. I recognise that the introduction of the housing support grant system and of housing plans are a permanent reminder of his tenure, and I know that the House will wish to pay tribute to him for them.
It is important to remember, however, that the Green Paper on housing published in 1977 was an extremely significant document. I do not think that I was being misleading when I pointed to the fact that not only did that document state that there was no longer an acute housing shortage in Scotland, but that the practice of the last Labour Government showed that they believed that to be the case.
It is a straightforward fact, which I know that the hon. Member for Provan will not deny, that between 1974 and 1979 the amount devoted to capital expenditure on housing in Scotland fell from £430 million to £277 million, using a common price base for the two years. That was a dramatic reduction. Therefore, it is not only the words of the Green Paper which showed that the Labour Government believed that the acute shortage in housing was over. Their deeds represented those words, and so it continued throughout their term of office.
I was disappointed when the hon. Member For Glasgow, Garscadden (Mr. Dewar) attacked the Government for not having the appropriate housing policy. But nowhere in his speech did we hear about an alternative housing policy which either he would wish the Government to follow, or which he believed a Labour Government should follow. We had one long complaint about resources, but we did not hear whether a Labour Government of which he might be a distinguished member


would seek to reverse the policy pursued by the last Labour Government, who reduced capital spending on housing throughout their term of office. Would a new Labour Government seek to do that? If they would not, why did not the hon. Member for Garscadden make that clear? If they would not seek to do that, in effect the hon. Gentleman was repudiating the policy of the Labour Administration and all those who took part in it. Perhaps he will tell us now what a Labour Government's policy would be.

Mr. Dewar: I am grateful to the Minister for the opportunity to do so. The first essential is the reversal of the draining of resources out of the housing sector. Without that, nothing is possible.

Mr. Rifkind: That is meaningless.

Mr. Dewar: If the hon. Gentleman will look at the figures in his White Paper, I think that he will come to the conclusion that the word "meaningless" amounts to a cruel refusal to face the facts. The resources are going.
Secondly, there will have to be new building, especially in the specialist areas—for the sheltered, the handicapped, the homeless, and so on—and also a genuine emphasis on rehabilitation and modernisation, both in peripheral schemes and in inner urban areas.

Mr. Rifkind: It is a sorry comment on the hon. Gentleman's contribution that it took an intervention after he had made his speech for us to begin to get the smatterings of a housing policy that he might wish to pursue when in office. He still has not answered the basic question, which is whether a future Labour Government in Scotland would reverse the dramatic fall in housing capital expenditure which occurred under the last Labour Government. The hon. Gentleman has chosen not to comment on that because he does not know the answer.
The policy which this Government are pursuing on housing goes far beyond the sale of council houses, though we take no shame in the fact that that is a major plank in our policy. Essentially, however, the first plank of our policy is to enhance the rights of Scotland's council tenants. We take the gravest exception to the ridiculous suggestions made earlier that somehow Scotland's Conservative Party is hostile to the interests of council tenants.
No one would think that it was this Conservative Government who, for the first time ever, gave security of tenure to Scotland's 1 million council tenants—a right which they have never had before. No one would think that it was this Conservative Government who, for the first time ever, gave local authority tenants the right to appeal against unfair conditions being laid down by local authority landlords. No one would think that it was this Conservative Government who were the first Administration to abolish residential qualifications which were keeping people off waiting lists and inhibiting job mobility. No one would think that it was this Conservative Government who, for the first time, required local authorities to publish allocation rules.
These rights have nothing to do with the right to buy. They are basic rights that every local authority tenant now has and which were introduced in the Tenants Rights' etc. (Scotland) Act, against which the Opposition voted

solidly. Scotland's council tenants will not forget that. On that aspect of policy, we have indicated not by words but by deeds that we have as much interest in the real needs of those council tenants, including those who may never purchase their homes—and we have enhanced the quality of their life and the tenancy of their homes.
The hon. Member for Fife, Central (Mr. Hamilton) implied that the figure of 3,000 for council house sales, which I had given him in a reply, was somehow misleading.

Mr. William Hamilton: It was the truth.

Mr. Rifkind: It was the truth at that time. There were 3,000 sales last December. But that figure is miles out of date after several months.

Mr. William Hamilton: What is it now?

Mr. Rifkind: It is well over 10,000. Combining together sales plus firm applications to buy, the figure is no longer 25,000 or even 30,000 but something over 34,000. It is increasing by hundreds, if not thousands, every week.
My hon. Friend the Member for Renfrewshire, East (Mr. Stewart) asked about the conflict of valuations. Clearly, it is up to the individual tenant to choose whether he wishes the district valuer or his own valuer to take part in these valuations. That is a right which should be made clear to tenants. If local authorities such as Renfrew are imposing unfair and unacceptable conditions, that can be dealt with by the Lands Tribunal, which will no doubt come to the result and the conclusion that my hon. Friend indicated.

Mr. Michael Ancram: Is my hon. Friend aware that the Lands Tribunal has recently—on 4 May, I believe—increased the fee for lodgment of appeals from 75p to £6? That appears to be an increase of 600 per cent.

Mr. Rifkind: We shall look into that matter. We do not want in any way to discourage tenants from using their right of appeal to the Lands Tribunal.
Therefore, the first objective of our housing policy is to enhance the rights of Scotland's local authority tenants, whether or not they wish to exercise the right to buy. We have shown that in deeds as well as words, as I think that any fair-minded Member would accept.
Apart from that aspect, the second objective is to concentrate the resources available on the capital side of housing expenditure rather than on the revenue side. I mentioned earlier how under the Labour Government the expenditure on capital had fallen. But it was even worse than that, because not only did the grand total fall, but the percentage of total housing expenditure—that is, expenditure which also includes subsidies—fell considerably. At the beginning of Labour's term of office, 61 per cent. of the total was spent on capital, but by the end it was only 51 per cent., and that was on a declining total.
Therefore, there was not only a substantial fall in capital expenditure but a shift in the burden of the way in which those resources were used towards subsidies to individual tenants in a way which many of us, including, I think, the hon. Member for Provan, might not feel was entirely realistic or sensible. We are seeking to reverse that trend in order to ensure that the limited resources that are


available are increasingly concentrated on the capital side, where they can create long-term benefit for the community.
In pursuing this objective, we can demonstrate that benefit in a number of ways. The hon. Member for Provan asked what was happening to receipts from council house sales. Because we estimated a net receipt from council house sales of some £20 million—which is likely to be an under-estimate—we were able to increase total capital allocations by £20 million more than would otherwise have been possible. That is one example of the benefit that the sales policy can have on the capital side of housing development.
But there is another major area. The hon. Member for Garscadden attacked us because of our link between rents and capital allocations. The basic point which he has failed to acknowledge is that we were proceeding from a situation in which an estimate has to be made of the likely expenditure on housing which will take the form of subsidies, either through central Government subsidy or some form of rate fund contribution. As with all Governments, we had to make that estimate.
Because in past years local authorities have been notoriously reluctant to introduce realistic rents, if we had applied the same policy as had been pursued in previous years, the amount that we could have made available for capital allocations would not have been £35 million less, as the hon. Gentleman's figures showed, but less by substantially more than that—perhaps up to another £20 million less. Therefore, although local authorities would have been under no pressure from the central Government as to what their rent levels ought to be, the amount for capital expenditure would have been at least £20 million less than has been allocated to local authorities.
All Governments—not only the present Government—must take into account the overall sums that are available for housing expenditure. The fact that about 28 local authorities have had their maximum allocation provided shows that the rent levels that we have offered have not been unrealistic, especially when that figure can be increased to 30 if one takes into account two authorities which did not want the maximum allocation and therefore got simply the sums they had requested.

Mr. Dewar: I am sure that the Under-Secretary would not disagree when I say that his policy was to force up rents because he had made a social judgment about the need to do so. However, is he satisfied with the way in which the rate fund contribution is calculated, at just over £12 per capita, with no relation to the amount of public sector housing in the local authority district concerned?

Mr. Rifkind: This is the first year of the system. We shall be monitoring the way in which it is operated, and we may wish to make changes. The main objective was to ensure that the ability of a local authority to get its maximum allocation depended on its actions rather than the actions of other local authorities. That was a significant improvement on past policy.
Within total capital expenditure, our third priority is to concentrate the sums available, not on general purpose building in the public sector, but on special needs. That is why, for example, the Housing Corporation this year is getting more than it has ever had—although I freely concede that it is a lot less than it would like. It is why, for example, in the non-housing revenue account of local

authorities, where they are giving help to deal with the rehabilitation of derelict properties in the private sector, there has been an increase in real terms of 13 per cent. since the present Government came to office. It is why, when some extra funds were available for the housing associations, we decided to propose to the Housing Corporation that they should be concentrated on sheltered housing for the handicapped, and so on. Therefore, these are the special needs which, as my hon. Friend the Member for South Angus (Mr. Fraser) correctly pointed out, are clearly where the priorities now lie.
What was interesting about the Labour Government's Green Paper was not simply the oft-quoted remark on the first page but the fact that on page 17 they quoted, with implicit approval, a study which showed that on any reasonable combination of assumptions the need for new building in the public sector was likely to be substantially below the numbers provided in recent years. That was their conclusion. There is no reason to depart from it simply because the Government have changed and the previous Government are now sitting on the Opposition Benches. This is an important consideration.
The other area of special needs is the problem of dampness. We shall be taking increasing account of the problem of dampness, as it is indicated by the housing plan of a local authority, in determining what the proper capital allocation should be. I say to the hon. Member for Inverness (Mr. Johnston) that clearly that is one of the special needs which the housing plan system is already designed to represent.
The final area of housing policy on which I comment is one which I believe has, in many respects, the greatest long-term importance. That is that we wish to see a gradual end to the residential segregation that has characterised Scottish housing for many years. I think that I can say with all fairness—and even Opposition Members would agree—that there is something very depressing about Scottish housing, in that one will go through a vast estate which is owner-occupied and then cross a road and see a vast single-tenure council estate. Not only, therefore, do we have housing segregation but also the social segregation that flows from it. I think that we shall see, as we wish to see, the gradual break-up of that pattern in a number of ways. One of the means by which it will happen is the sale of council houses to sitting tenants, because even in what all hon. Members recognise to be the best areas, not all houses will be sold.
In addition to that, we have the example of Martello Court, which has been referred to by a number of hon. Members who have spoken in the debate. That example demonstrates that even a tower block with a rotten reputation, in an area which no one would claim to be a high amenity area, does not, with the proper work done on it, have to be demolished or left to vandalism, but can be occupied to provide low-cost homes. It i; most interesting that a substantial proportion of people now living in Martello Court were previously council tenants living in the Pilton area, near that block, but who have now been able to become home owners in a way that would not otherwise have been possible.
I give credit to Glasgow district council for its homesteading operation in Easterhouse. In a very similar way, it has shown that in parts of Glasgow which no tenant would be prepared to touch with a bargepole, if the price is right, it has been able to find young couples who are only too delighted to move in. That not only provides them


with homes, but, much more important, it gradually breaks up the depressing single-tenure social segregation that has been characteristic of much of Scotland's housing and which I do not believe any hon. Member would wish to perpetuate.
Our housing policy goes way beyond the Tenants' Rights, Etc. (Scotland) Act and the sale of council houses. It goes on to a determination to concentrate the resources on special needs. It has a social objective of creating a less divisive housing community within Scotland. That is a policy that most Labour Members, although by no means all, would equally wish to pursue. They have analysed the problem. They have recognised the defects that past housing policies have caused over the years. However, they have not been prepared to grasp the radical solutions that are required to deal with some of the problems. They have been able to think only in terms of resources. We all accept that resources are vital and will continue to be so. However, there are other criteria. A combination of resources and sensible policies will be the only means of achieving the desired result. That is why we cannot accept the motion and why, if there is a Division, I shall invite my right hon. and hon. Friends to reject it out of hand.

Mr. Gordon Wilson:: rose——

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Mr. Gordon Wilson.

Mr. Robert Hughes: On a point of order, Mr. Deputy Speaker. Bearing in mind the total number of Scottish Members, it is unfair that two parties, one of which can muster three Members and the other two, should be given such a large slice of debate in Opposition time. One Labour Member, my hon. Friend the Member for Glasgow, Provan (Mr. Brown), introduced the debate. He was rightly called to do so, as he had good fortune in the ballot. Apart from my hon. Friend, two Labour Back Benchers and one Liberal Member, the hon. Member for Inverness (Mr. Johnston), have contributed to the debate. You have now called the member of another minority party, namely, the hon. Member for Dundee, East (Mr. Wilson).
It is grossly unfair that minority parties are being given such a large slice of the debate. It seems that the two minority parties in Scotland are to get the same Back-Bench time as is the Labour Party, which is the majority party in Scotland. I accept that minority parties have rights, but it is about time that the Chair recognised that majority parties have rights, too, and that they are entitled to exercise them.
I am the Chairman of the Select Committee that prepared a report on capital allocation, which has featured in a number of speeches in the debate. On the general issue of Back-Bench opinion among the majority party, and as Chairman of the Select Committee that reported on capital allocation, I take grave exception to the representative of the Scottish National Party being called to contribute to the debate.

Mr. Deputy Speaker: The hon. Gentleman has had quite a good slice of the time available for the debate. The issue that he has raised is one that is constantly in Mr.

Speaker's mind. Mr. Speaker exercises his discretion as best he can, and I am acting in accordance with his instructions.

Mr. McQuarrie: Further to the point of order, Mr. Deputy Speaker. Surely it is the right of the Chair to call such hon. Members as it thinks fit, in accordance with the total number of hon. Members. If there are more hon. Members on one side of the Chamber than on the other, the Chair has the right and the prerogative to call hon. Members on that basis irrespective of whether an hon. Member represents the Opposition party, the Government party or a minority party.

Mr. Deputy Speaker: The hon. Gentleman is aware that we now have less than half an hour before the debate concludes.

Mr. Wilson: rose——

Mr. Robert Hughes: Further to that point of order, Mr. Deputy Speaker——

Mr. Russell Johnston: The hon. Gentleman does not give a damn for minority interests.

Mr. Robert Hughes: The situation is aggravated by the fact that what I have described happens time after time. If minority parties occasionally took such a large proportion of the time available for debate that would be perhaps difficult to accept, but acceptable. Surely it is right that you should be able to exercise discretion and call those who have been in their places throughout the debate.

Mr. Deputy Speaker: I assure the hon. Gentleman that the matters that he has raised are fully in Mr. Speaker's mind. I have no doubt that Mr. Speaker will read what the hon. Gentleman has said.

Mr. Russell Johnston: Further to that point of order, Mr. Deputy Speaker. The hon. Member for Aberdeen, North (Mr. Hughes) is advancing an unfair argument. In the previous Scottish debate the Liberal Party made no attempt to speak. Secondly, the hon. Gentleman has shown no interest in the past in the fair representation of minority interests in the House.

Mr. William Hamilton: Further to that point of order, Mr. Deputy Speaker. I have raised this issue previously, and so have others of my hon. Friends. It is time that a decision was taken by the Chair. We want to protect minorities, but the Scottish National Party has only two hon. Members in the Chamber, while the Liberal Party in Scotland has only three. The Labour Party has more than 40 representatives in this place. My hon. Friend the Member for Aberdeen, North (Mr. Hughes) has been present throughout the debate. I hope that Mr. Speaker and the other occupants of the Chair will consider his argument seriously.

Mr. Wilson: I have finally got to my feet, after four minutes enjoyed by the hon. Member for Aberdeen, North (Mr. Hughes). Although the Labour Party is undoubtedly Scotland's largest party, it has not been represented in substantial numbers during this important debate on housing. Secondly, I, too, have been present throughout the afternoon. Thirdly, the opinion polls tell us that the Scottish National Party is Scotland's second largest party. As the hon. Member for Inverness (Mr. Johnston) knows, had there been a fairer electoral system at the 1979 general election there would have been 11 SNP Members in this place.
The Minister concluded by placing reliance on resources and sensible policies. In referring to those two factors he summed up the defects of Government policy. It seems that housing has been chosen to bear the brunt of the public expenditure cuts. About three-quarters of all the cuts in Scotland that will be made from 1981 until 1984 will be in housing. The total expenditure is expected to be £614 million at 1980 survey prices. That compares with £872 million in 1974–75, which admittedly was a peak year. However, since then there has been a steady decline under successive Governments, and that is a damning condemnation of the attitude of both main parties towards housing.
As housing conditions change, so, too, must priorities for expenditure. I shall concentrate on the areas of housing that require much more attention. For too long in Scotland we have been conditioned to talking about housing in terms of quantity. Housing starts and completions may mean a great deal or nothing. In the past we have paid too little attention to quality. We are now having to face problems of renovation and modernisation because of financial skimping over a long period. There are problems with the more recent housing stock that point to fundamental deficiencies in quality.
As hon. Members and others who are expert on housing swing away from the idea that quantity is everything and quality is nothing there is a danger that they will forget that in specialised forms of housing there are shortages. When we were discussing the surplus of houses it was right that it was described as a crude surplus. An analysis would disclose deficiencies in housing type, in housing size and in housing allocation. For example, a house that is 18 miles from one area may be of no use or attraction to someone living in a different area. There are particular problems for those living in rural areas because of public transport shortcomings.
The Minister places some reliance on funding. I think that the hon. Gentleman is disguising the fact that there is insufficient money in the housing account to enable district councils to increase the number of starts. There is a shortage of five-apartment houses, and even larger houses, in many areas. There is also a shortage of sheltered and adapted housing. Certainly the substantial housing work load that I have as a constituency Member discloses deficiencies in certain sizes of housing, so that people go again and again to the housing officers and are still unable to transfer to a type or size of house more suitable for them.
A particular worry in my area is the low priority given under the local rules to matters connected with overcrowding, particularly in relation to families with children of both sexes. The points system has been abandoned, but one begins to build up the equivalent of points for priority under the Dundee system only when the application for transfer is made. If the application is put in when the children are very young one will be fairly high on the scale, but if the application for transfer is made only when the children are between 10 and 14, when puberty approaches and one naturally wishes to separate the children, the houses are often not available. That is one problem relating to overcrowding, not to mention the problem of the very large houses that are sometimes needed but cannot be found.
My second point relates to the use of funds for modernisation. We have all come across cases in which modernisation work in the public sector has been cut back.
The Scottish Special Housing Association is also facing a lack of funds, and modernisation programmes are therefore being stopped or postponed. People who have been waiting for years, watching the modernisation programme move closer to their area, cannot understand why the guillotine has come down and there is no prospect of modernisation for the time being.
Quite apart from the damage in human terms, if modernisation and repair work are not carried out sufficiently quickly the housing stock will deteriorate. The point was well put by Mr. George Smith, the Dundee housing director, when he said that unless action was taken within 10 or 15 years the council might be driven to demolish houses that would have been available if modernisation had been carried out. In terms of the proper use of public money it is wrong that essential repair work is not being done. This occurs also in the private sector, although the owner would be well advised to keep his house in good repair, because he knows that if he does not substantial bills will roll in later as a result of lack of investment in the house.
The same applies to environmental improvements. If these are not carried out, whole areas begin to slide, and more problem housing schemes develop as a result.
I have received a complaint from the Hillcrest housing association, one of the biggest housing associations in Dundee, that, due to the operation of the rent assessment committees and the rent officers, it now has to charge such substantial rents that that is beginning to knock out a segment of its market. Action is therefore needed in that context.
Now that we have reached this stage of the debate, the Minister will not be able to reply. Nevertheless, I point this out to him and will probably write to him for an explanation of why Tayside seems to have had the biggest drop in Scotland—about 37 per cent.—in housing finance when it is clear to those of us who live in Dundee and to those who have read "Dead End Street" that the city has considerable housing problems.

Mr. Rifkind: As a Member of Parliament from Dundee, the hon. Gentleman will recall that the council there decided to make no increase in rents this year. It was the only authority in Scotland to make that decision. Consequently, there was a very heavy rate fund contribution. As it had been informed beforehand, that meant that it lost about £3 million from what would have been its capital allocation.

Mr. Wilson: I am well aware of what has happened. It is not for me to defend the actions of Dundee district council. It is for me, however, to speak for the interests of tenants in the district, and for those who are not tenants, who cannot get a house and therefore do not benefit from the rent freeze. It is my responsibility to protect their interests and to speak up for them. The Minister's action in applying to the capital housing account an argument relating to the revenue side will cause real distress to many people in Dundee. In human terms, I cannot understand how any Minister can be prepared to sanction such inhuman treatment.

Mr. Rifkind: The hon. Gentleman has failed to grasp the point. A maximum sum was available for housing expenditure in Dundee. If the council chose to use a high proportion of that in rate fund contributions to its housing account, it took that decision in the knowledge that it


would mean that less money would be available for capital expenditure. Under the Government system of housing expenditure limits, the more that is spent on one form of housing, the less there is that can be spent on others.

Mr. Wilson: The Minister is saying in effect that, due to a clash of opinion between the Government and Dundee district council, he is prepared to allow bad housing conditions to continue. I believe that that is a misuse of Government authority in these matters. I appeal to him even now to reconsider his wrong policies.

Mr. Ernie Ross: The Minister is attacking the Labour administration in Dundee. The House may be interested to know that even without any increase in rents the rate fund contribution to the housing revenue account is average for Scotland.

Mr. Wilson: I am glad that the hon. Gentleman arrived back in time to make that point and to defend the interests of the district council. I leave the matter there. I disagree with the Minister, and I shall put my views on record.
Having run out of time in this mini debate, I refer only briefly to the problem of dampness. The matter has been raised many times in debates and I do not think that anyone in the House is satisfied with the approach adopted. I was certainly not satisfied with the reply given to the hon. Member for Inverness at Scottish Question Time. In view of the information produced by the Scottish local authorities special housing group, I appeal to the Minister to give immediate and urgent attention to a problem that is causing misery in tens of thousands of Scottish homes.

Mr. Maxton: On a point of order, Mr. Deputy Speaker. I did not intervene in the series of points of order concerning the rights of minority parties. Although I am a member of the majority party, I have relatives who are not, and I respect minority parties. Nevertheless, I take exception to the fact that in this and in other debates those rights have been entirely at the expense of Labour Members, and never at the expense of Conservative Members. Surely they should be shared equally between the two sides of the House, particularly as the Labour Party is the majority party in Scotland.

Mr. Michael Ancram: I listened with great attention to the speech of the hon. Member for Dundee, East (Mr. Wilson), and compared it most favourably with that made by the hon. Member for Glasgow, Garscadden (Mr. Dewar). It was said that the Minister was an advocate, and that advocates were used to defending the indefensible. The hon. Member for Dundee, East and the hon. Member for Garscadden are both solicitors, and I was always told that solicitors were trained to convey. On this occasion they have conveyed nothing of their respective parties' policies on housing. It is sad that, in a debate of this sort, we should have been treated by two official spokesmen to nothing more than a general criticism of what the Government are doing.
I am sure that on this serious problem the people of Scotland are waiting to hear what the Scottish National Party and the Scottish Labour Party will have to offer them when the next general election is held. I hope that we shall soon have another housing debate so that the two hon. Gentlemen may have the opportunity to put forward their policies.

Mr. Dewar: I shall be pleased to tell the hon. Gentleman our policy at any time, but I remind him that tonight we have been debating a motion that specifically condemns Conservative Party policy on this matter. We stuck to that. Our condemnation is clearly shared by the electorate of Scotland, judging by the recent opinion polls.

Mr. Ancram: I look forward to the occasion when the hon. Gentleman will tell us about the Labour Party's policy. I hope that when he does so he will inform us as to which part of his party's policy it is, because I know that his opinions differ somewhat from those of others.
I join in the congratulations to the hon. Member for Glasgow, Provan (Mr. Brown) on initiating the debate. In many ways it has been a useful debate. As usual, he made a sincere and well-informed speech about the housing problems facing Scotland. I sometimes feel that he suffers from a somewhat embarrassed release from the constraints of ministerial office. Indeed, Conservative Members feel sorry for him, as he seems to be the only person defending the record of the Labour Government against the attacks of his colleagues. But we thank him, and on his birthday we congratulate him on having the courage to raise this topic again.
In debates on housing, I am always fascinated in listening to the speeches of hon. Members on both sides of the House. Labour Members, when they are here, always speak with great passion about houses, as though houses were inanimate objects—statistics which they can use in various ways. They very rarely speak about the people who live in houses and what those people want. That is a genuine distinction between Labour Members and Conservative Members. We believe that houses are homes for people and that we can only look at housing in terms of the requirements and desires of the people who live in them.
Hon. Members have talked about depressed council house areas. One of the difficulties has been the lack of involvement of the people who live in the houses in the way that the houses were run. They were not able to do things for their own homes. It is for that reason, above all, that Conservative Members welcomed the Tenants' Rights, Etc. (Scotland) Act last year, for in many ways it gave tenants and people who eventually bought their council houses the right to decide for themselves in their own homes—a right which they had not had before.
It is a sad condemnation of Labour Members that within all their speeches there is the wistful longing for the days when councils controlled other people's lives. By our legislation we have enabled people to be involved in their homes and their own houses.
There is more work to be done, and I am sure that the Minister realises it. He mentioned that, under the same legislation, we have required councils to publish their allocation policies. But even though this requirement is in statute form, in many ways it is not enough. In my experience as a Member of Parliament, the matter of allocations is one of the greatest areas of concern of people who come to see me.
There are people who have been on waiting lists and transfer lists for years, and they do not understand why they are continually seeing people getting in before them who in many cases applied after them. If we are to satisfy people that the system of housing allocation in Scotland is correct, justice must not only be done but be seen to be done.
I hope that pressure can be brought to bear on housing authorities to ensure that there is a greater degree of disclosure of the working of their points systems. People need to know why somebody who applied later often gets housing before someone who has been on the list for a considerable time.
But we have made great steps. It is all very well for the hon. Member for Garscadden to complain that we say a great deal about the right to buy that we have given council tenants. We have been holding a series of public meetings around Scotland to inform people of that right. We have held them in Glasgow and in Edinburgh, and in the summer they will be held all over Scotland. The meetings have been crowded to the doors with people who want to learn about their rights in this connection.

Mr. John MacKay: I was in the constituency of the right hon. Member for Glasgow, Craigton (Mr. Millan) on Friday night. I was informed that Conservative councillors had had over 200 people at one meeting to make inquiries about council housing. That is probably a much larger number of people than the right hon. Member for Craigton has at his political meetings.

Mr. Ancram: I am grateful to my hon. Friend for his intervention. From the letters that I receive as chairman of the Conservative Party in Scotland, I know that there is growing anger at the deliberate delays that are being practised by many councils in Scotland in selling council houses.
It was fascinating to listen to the speech of the hon. Member for Fife, Central (Mr. Hamilton). I have always wondered what was the basic objection to the sale of council houses. Today he told us. He said that he was not against councils selling their houses; he was against councils being forced unwillingly to sell their houses. Suddenly the hon. Gentleman has become the champion of those who are against compulsory purchase, after the last 50 years of compulsory purchase working in the other direction, when he said not a word against it. It would appear that the hon. Gentleman is selective about the principles that he adopts.
As the Minister pointed out, our policy is not just about the sale of council houses; it is about giving rights to council tenants. They may be simple rights but they are important rights. People have the right to decide on their own scheme of decoration in their own home. If they do something with their own hands in their own home, they know that it will not be taken by the council without compensation. These rights are vital to people if they are to feel that their houses are their homes.
The fact that Labour Members never mention these factors makes me feel that they are ashamed that alter years in office they did not have the courage to give council tenants, for whom they always say they speak, these basic and important rights. We are giving back to people a pride in their own homes and in their areas. We are doing that by giving them a chance to influence what is done. As the Minister pointed out, in this way we are getting away from the atmosphere in which people do not care about their home because there is nothing they car do about it. Vandalism is but one sympton of that atmosphere.
When the right hon. Member for Rutherglen (Mr. MacKenzie) said that he did not know the answer to the problems created by that depressing atmosphere, it struck me as a doctrine of despair. Surely the answer lies in people. The hon. Member for Aberdeen, North (Mr. Hughes) will remember when he and I were involved in the advisory council of Shelter in Scotland. We tried various experiments with neighbourhood action schemes, encouraging people in tenements in Glasgow to take an interest in their own property—often highly vandalised and decrepit property. We encouraged them to build up the areas and the amenities, to plant a little garden and to paint the staircase. By so doing we were giving them an increasing involvement and a pride. In the end, it raised the whole standard and quality of the area.
That is a positive way in which to look at the depressed areas in our council estates. It is no use Labour Members telling us that we are creating the depressed areas by council house sales, because the depressed areas already exist. I know where they are in Edinburgh and in Glasgow. By getting people involved in their own homes and houses, we have a real chance of doing something to change the position.

Question put and negatived.

North Sea Oil and Gas Resources

Mr. Tim Eggar: I beg to move,
That this House recognises the need for a stable North Sea oil tax régime to maximise Government revenue while providing returns to the oil companies adequate to ensure development of marginal fields; welcomes Her Majesty's Government's willingness to consider alternative tax structures; congratulates Her Majesty's Government on its determination to denationalize the British National Oil Corporation; and urges that speedy action be taken to remove——

It being Seven o'clock, MR. DEPUTY SPEAKER interrupted the proceedings.

Orders of the Day — Iron and Steel Bill

7 pm

The Minister of State, Department of Industry (Mr. Norman Tebbit): I beg to move, That the Bill be now read the Third time.
This short but important measure has been debated in a constructive, though vigorous, fashion. I do not believe that opposition is diminished by concentrating arguments in the way that the Opposition have concentrated theirs on the issues at stake in the Bill. As ever, we have concentrated on the points of difference between us rather than on those on which we are all, or at least most of us, agreed.
The financial clauses have been not fought over but cried over. To some extent, that was a pity, although I suspect that the Opposition were none too anxious to kick at a ball that was likely to finish in their own goal. I must confess to feeling rather less than comfortable at legislating to write off as lost and gone for ever £3½ billion of taxpayers' money. Nevertheless, it is well to remember that the Bill was necessary because the policies pursued by previous Governments, the actions of board members, managers and other workers had left the British Steel Corporation bankrupt. These write-offs, these reductions in interest burdens on the BSC—because the unhappy taxpayer will go on paying the interest—and the commitment of further large sums of taxpayers' money are the cause, the reason, the motive and the necessity for the other provisions in the Bill beyond the financial clauses.
The provisions of the original clause 1 and the greatly strengthened new clause 1, which we discussed last week, arise from the sad history of the BSC. They are not to be read, in the way that some hon. Members have read them, as a statement of intent to shut down the steel industry.
As my right hon. Friend the Secretary of State said on Second Reading, the Bill will allow the corporation's activities to be reduced "virtually to nil." As ever, my right hon. Friend was totally frank and assiduous in explaining to the House the possible implications of the powers that we seek. But, of course, every trading company has the power to reduce its activities to nil. That does not compel it to do so. Similarly, the removal of the duty to supply does not proclaim the intention to cease to supply across the board. But it puts the British Steel Corporation on notice, and implies to the hard-pressed taxpayer, too, that there is a limit to the extent to which loss making can be subsidised and supported. Is there anyone on either side of the House who would disagree with that? If so, in the words of the marriage service,
let him now speak, or else hereafter for ever hold his peace.
No one seems to be inclined to speak, so at least we are agreed on that.
The mere removal of the duty to supply will not close down the BSC, nor, unhappily, will it of itself introduce private sector capital into the industry. At present, the trend seems to be for private sector capital to be leaving rather than entering the steel industry. The subsections of the new clause 1, giving powers to require the BSC to set up Companies Act companies, are designed to help stem that private sector capital withdrawal.
I have no reason to believe that the powers will be used. I believe that Mr. MacGregor will be perfectly willing to use Companies Act companies to improve the management of the corporation, to introduce private capital to what are at present public sector operations, and to give greater transparency and, therefore, assurance of fair play in the corporation's dealings with private sector companies.
We have already created Phoenix I—Allied Steel and Wire—and I assure the House that the reorganisation of the engineering steels sector, which is intended to lead to Phoenix II—or Phoenix II and III—is being pursued. Allied Steel and Wire will be a private sector company, although 50-50 owned between GKN and the British Steel Corporation. The pattern or form of the engineering steels company, or companies, is not yet decided. There are still difficult decisions to be taken by those who are, or might be, involved in such a new company or companies. My aim will be to ensure that, so far as it is within my gift, the new companies which may be created will not become pensioners of the taxpayer.
The Bill is intended, by the organisational changes that it makes possible, by the reserve powers granted to the Secretary of State and by the financial provisions within it, to maximise the prospects of success for the steel industry in Britain. Prudently, it makes possible contingency plans in the event that success eludes the British Steel Corporation in its present form.
I have every sympathy with those in the whole industry, private or public sector, who have or will become victims of the mistakes of the past. The private sector has every right to call for fair play in competition with the State sector, which enjoys access to public funds. The Bill will help towards that end.
Finally, I should say that the chances of success depend greatly upon how the European Community and its steelmakers arrange their affairs. I shall continue to do all that I can to encourage the steelmakers to reach voluntary agreements on production quotas for their various products. If full voluntary agreement cannot be reached by all or most of the significant producers, we may have to help them to reach agreement. Such production cutbacks and devices can only be short-term responses to the problems caused by the continued expansion of subsidised steelmaking within the European Community.
My long-term aim, which I believe is widely shared within the Community, is to eliminate such subsidies and, with them, the excess capacity and misuse of resources which they have brought about. At the last meeting of steel Ministers in the Community, we were close to agreement. It was mainly a matter of time scale which divided us, and I believed then, as we all did, that we could bridge that gap. Of course, we now await the formation of the new Government in France, and I look forward to meeting my new French colleague. The presidential election and change of Government have delayed matters, but I hope that the substance of the policies pursued in this area by the French Government so far will not be changed.
The British steel industry and its workers are working together now with a determination, skill and unity of purpose between the shop floor and the board room that we have not seen for many years. With the Bill and its write-off of past mistakes and debts, let us hope that we can all put the past behind us and create a successful steel industry in Britain. I believe that the Bill will assist to that end, and I commend it to the House.

Dr. John Cunningham: Now that we have reached Third Reading, no one can complain that the steel industry has been ignored by hon. Members. Since last December there have been more than a dozen statements and debates on the industry.
When he introduced the Bill on Second Reading, the Secretary of State spoke, among other things, of the possibility of running down the BSC to nil. However, in Committee, the Minister of State spoke about the public sector of the steel industry having a substantial role in future. We endorse that view. We often say that Bills, statements and speeches have stings in the tail. In this case, the reverse is true. The Bill had a warhead in clause 1, and was strengthened by a new clause that was introduced at almost the eleventh hour. Clause 1 and new clause 1 gave powers to the Secretary of State to follow. a route to privatisation. We opposed not only those powers, but privatisation. Among other things, the Bill allowed for the removal of a trade union's statutory right to consultation. We were fundamentally opposed to that.
As hon. Members know, we did not vote against Second Reading. Indeed, we shall not divide the House tonight. As the Minister generously said, we have concentrated our opposition on the provisions in clause 1 and in new clause 1, which we strongly object to. Of course, we welcome the Bill's financial provisions. We offer our hopes for the success of the corporation's future. Clearly financial reconstruction was long overdue. That aspect of the Government's measures is welcome not only to us, but to the thousands of people associated with the industry. It would be churlish not to acknowledge that.
There are far more important issues for the industry's future than clause 1 or new clause 1. We have registered our opposition to those measures and I should not like anything that I say tonight to detract from what we have said. However, I shall not dwell on those provisions in great detail today. Three things are important to the future of the industry. A combination of events has thrown both the public and private sectors of the steel industry into a deep crisis. The economic and industrial situation is causing public and private steel plants grave difficulties. Although Governments are not usually wholly right or wrong, or wholly to blame for circumstances, this Government cannot escape the fact that they hold a significant measure of responsibility for the conditions that prevail.
The Government introduced unrealistic cash limits, which had a substantial impact on the industry. They were largely responsible for last year's disastrous strike, which had a serious effect on the industry. As the Minister rightly said, the crisis of the European steel industry has had an important bearing on us. The appointment of Mr. MacGregor, the introduction of his corporate plan, capital reconstruction and the EEC agreement constitute the grounds for real hope for a more stable and successful future for both the public and private sectors. Those two sectors are almost inextricably linked, together with their fortunes. Such things are far more germane to a debate about the future of the industry than the provisions for privatisation.
As he has done before, the Minister said that we should regard the proposals that we object to so strenuously as reserve measures. The hon. Member for Knutsford (Mr. Bruce-Gardyne) is not in the Chamber, but last week I

think that he said that he did not invisage the proposals being used. Perhaps clause 1 and new clause 1 are not so much warheads as heatshields with which to protect the Minister from the Government's re-entry into the real world, where the BSC is recognised as being crucial to our industrial well-being.
The Minister quoted lines from the marriage service. Some of his hon. Friends may speak not about marriages, but about shotgun weddings, when they discuss what has been happening in the interface between British Steel and the private sector. On behalf of the Opposition, I welcome proposals to rationalise the industry where possible, and to save not only jobs but the steel industry's capability in various important areas. We have strong reservations about the possible enforced disposal of public assets. However, we are not against what both the Minister and I have described as new joint ventures. They may turn out to be successful. We hope that they will be.
I hope that the Minister will not take too much notice of complaints to the effect that the public corporation is being too aggressive or unfair in the market place. I reiterate what has often been said, namely, that Mr MacGregor was appointed to revitalise the corporation and too make it aggressive. His stated aim is to win back the BSC's share of the market. As the Minister said at Question Time today, that market share largely fell to foreign competition and not to the private sector of British steel.
There is much to welcome in the Bill as well as much to criticise and oppose. The Bill will pass on to the statute book. We join with the Minister in hoping for a better future for our steel industry, and for a more rational situation as between the British steel industry and the steel industries of the competitor countries of the EEC. I make no apology for repeating that there is much evidence to show that other countries have been ruthless in their determination to allow their steel industries to survive at all costs, regardless of the cost to others.
We must be vigilant. I notice that the Minister is nodding his head. I am pleased that we agree on that as well as on several other points. No one can believe that the Secretary of State's talk of running down the corporation to nil is wise or justified, given our circumstances, our position as a maritime nation, our defence commitments and all that the use of steel in the British economy entails. It would be a sad day if the provisions in clause 1 were ever implemented. Although I welcome much of what is proposed, there is a great deal to be done in revitalising, rejuvenating and recreating the demand for steel in the British economy. The Government will be responsible for the ensuing success or failure.

Mr. Edward du Cann: The hon. Member for Whitehaven (Dr. Cunningham) always speaks with care and authority on industrial matters. I agree with him that the fortunes—if "fortunes" is the right word—of both the private and public steel sectors are inextricably mixed.
I agree especially, as did the whole House—and the Minister of State was careful to challenge us to deny it if we thought it not true—that there is a limit to the subsidisation at public expense of the publicly owned steel industry in the United Kingdom. I also agree with the striking phrase that my hon. Friend used a moment later, when he said that we cannot allow the publicly owned steel industry to be, or to become, as it is, the pensioner of the


taxpayer. I have a high regard and admiration for my hon. Friend. I give him notice that many of his right hon. and hon. Friends will hold him and the Secretary of State to those clear and specific undertakings.
I have a commercial interest in the steel industry. I am a director of a company which has an important subsidiary in the engineering steel sector. Therefore I have a practical involvement in this great British industry. I take pride in that. I have always admired the men in the British steel industry. As I come to know them better, I admire them and their great skills even more. They and their skills are a magnificent asset. The House has a duty to ensure that we maximise their use in the interests of the nation and of all those who live in the great steel towns such as Sheffield, Scunthorpe and Llanelli. We are not doing that. It is a standing indictment of the way in which we are managing our affairs. I repeat my implacable view that our aim must be to ensure that this fine asset is better used.
This is a Third Reading debate and we must talk about the Bill. As my right hon. Friend the Secretary of State said on 19 March, the Bill has two purposes. They were outlined in the speeches by the Minister of State and the hon. Member for Whitehaven. Privatisation is the first, and financial support the second. We have not fought over that, but perhaps we should have. As I stand strongly behind the first objective, so I object to the second.
I hope that either the Minister of State or the Under-Secretary of State, for whose talents I also have great regard, will be prepared to say a litte more about plans in that regard. Redpath, Dorman, Long should be the first candidate for privatisation. I hope that that will come about before long. Talking about privatisation in general is one matter, but we should like progress to be made to that end.
If privatisation is the first objective of the Bill, one must ask a question—and I pose it plainly and with feeling. Why in the meantime have the Government thought it right to be apparently indifferent to the existing private producers? Vast sums have been afforded by the taxpayer to the public sector, but the private producers, one after another, are going to the wall.
Duport was the first and most obvious, and, for the people of Llanelli, the most tragic, example. One does not have to be a great logician to know that it cannot be right to argue for privatisation and at the same time to be watching and conniving at policies that result in the existing private sector becoming smaller.
Some statistics might interest the House. The general position is that in May 1979, the month when I was proud to celebrate the election of a Conservative Administration, of the total crude steel production in the United Kingdom, the British Steel Corporation State sector was producing 82 per cent, and the private sector 18 per cent. Two years later, of the total crude steel production in the United Kingdom the public sector is producing 86 per cent. and the private sector's share has fallen to 14 per cent. In other words, the private sector's proportion has fallen by about 20 per cent. It is likely to fall further.
What of the future? If one asks whether the achievement of the commercial objectives set for the BSC by the Government is more likely because of the difficulties in the private sector, or perhaps the elimination of large parts of it, the answer, alas, is "Yes". That is a wrong policy. There were reasons and historic accidents

that led to it. Perhaps the House has not watched sufficiently changes of mind by the Government, admittedly before my hon. Friend had responsibility. The position is wrong. It needs urgent re-examination.
If the ordinary commercial criteria had been applied in the last two years, substantial parts of the British Steel Corporation would have gone out of business. The more efficient private sector, a substantial part of which did not join the steelworkers' strike, would have survived and would now be prosperous. However, instead of the private sector being prosperous and surviving, the reverse has occurred. The private sector is steadily going out of business while the State sector continues on its merry way.
That is why I laid such emphasis on the fine, important and trustworthy words by my hon. Friend at the beginning of the debate. Of course the hon. Member for Whitehaven was right to stress the general trading difficulties, which are severe. There is a severe recession here as there is throughout the Western world. There is over-capacity in Europe to which the hon. Gentleman correctly devoted a large part of his speech.
Another fact was inherited and requires emphasis. Neither side of the House has yet found a universal solution to the immense problem of managing any nationalised industry. That applies in particular to a complex organisation such as the BSC. However, my right hon. and hon. Friends and much of the nation take pride in the theme of the Government and their activities, which have found an important practical result in our economy. I am referring to the need for realism, the need to face our economic problems and to understand, as my right hon. Friend the Prime Minister, in a striking phrase has declared, that pennies do not fall from Heaven and have to be earned here on Earth. What is sauce for the goose is sauce for the gander. There is, as there has to be, plenty of realism in the private sector. What is needed is more realism in the public sector—a substantial dose of it.
The financial provisions of the Bill provide for a write-off of no less than £3,500 million. That is a vast sum. One vow that the House should make is that never again shall we allow a situation of this sort to develop. My hon. Friend the Minister of State was right to emphasise that although the BSC may be saved interest in actual or potential terms, the taxpayer will still have to continue paying interest on that sum of money. It is extraordinary—I make this remark not for the first time in the House—that when somebody, some group of people or a succession of people are responsible for losing money on that scale, nobody seems to lose his job and nobody seems to be criticised. Nobody, as happened in the case of Admiral Byng, even gets shot. It is perhaps a pity that greater discipline does not prevail in our financial affairs.
A second financial aspect of the Bill is the continuing support about which I should like to make one or two points. I wish, first, to make what I think is a reasonable complaint. I do not know how many hon. Members have had the opportunity to read the document, dated 23 February, published by the British Steel Corporation on the background to the corporate plan. It consists of 13 pages and some appendices. The pages are double-spaced and there are large gaps on some pages. It is, I must inform my hon. Friend, the sketchiest and most inadequate prospectus that I have ever seen. If one published a document of this sort in the City, one would not be allowed to raise a sum as small as half a crown with it. I am told that it was impossible to publish more information because


the British Steel Corporation would be giving away commercial secrets. I find that excuse wholly inadequate. If one of our great British companies in the private sector wished to raise money, it would have to publish a much more detailed paper. Why are the public protected while hon. Members are not given the information which any intending stockholder would regard as his natural right and which those acting for him would see that he obtained?

Mr. Bill Homewood: The right hon. Gentleman in his last remark strikes a chord that was constantly raised in Committee on the Bill. It seemed to most hon. Members in the Committee to be complete and utter nonsense to spend so much time talking about a corporate plan that none of us had seen. The right hon. Gentleman is correct in what he says about the document. It is complete and utter nonsense and says nothing. I can assure the right hon. Gentleman that many hon. Members in the Committee posed the question whether the document really existed.
The right hon. Gentleman has touched on what I believe is the reason why we have never seen the document and why there is a tendency to hide behind commercial confidentiality. The right hon. Gentleman is on the wrong side of the fence. The corporate plan, I suggest, would prove more in favour of the public sector than the private sector that the right hon. Gentleman defends. I ask him to believe that what emerged in Committee was that Mr. MacGregor had been more successful in his operation of commercial activities within the iron and steel industry than had those on the private side of the industry whom the right hon. Gentleman seeks to defend.

Mr. Du Cann: I do not think that that is the reason. My experience is that the private sector, at any rate in the engineering steels section of the industry, produces at a considerably cheaper price than the BSC can produce.
Leaving that issue on one side, I am glad to make common cause with the hon. Gentleman over information. I have a simple view. We are privileged in this place to be the people's representatives. We are the guardians of the public purse. We are accountable for what happens to the taxpayers' money and how Ministers spend it. We have a responsibility to demand and to see that we get the fullest possible information. With full information, judgments can be made. With full information, those judgments will be fair. I am not concerned with the cause that such information supports. We should have the information. Our approach should always be that we shall vote no more money for steel, the National Health Service or anything else unless we have all the information that we need to determine whether the taxpayers' hard earned crust is properly spent.
I should like an assurance from the Minister that there will be a continuous report to the House on the progress of the corporate plan. May we have full information at all times? May we have a progress report now, before passing the Bill, on the financial results of the BSC for the first quarter of this year? What passes for a prospectus indicates the likelihood of a loss for the year of £318 million. How are we doing? Are we on target? It would be splendid if hon. Members could be given the figures by my hon. Friend. If progress is broadly on target, I rejoice, but we should be given the information.
I could not discover from the document the purchase costs of the Duport plant and details of investment in the

Round Oak plant which it is understood BSC will buy from Tube Investments. Are those items included in the total figure of £730 million? If one is short of cash, or if one is taking cash from unwilling suppliers of it, one has an especial duty to be careful what one does with it. I do not want to interfere in the commercial judgment of those responsible for running the BSC. Are we sure, however, that the BSC is being careful? I wonder whether the House knows that the BSC is topping up to a substantial extent the temporary short-time working subsidy that it gets from the taxpayer. I wonder whether the House knows that it is selling steel, in various cases, at a loss. I wonder whether the House knows that it gives redundancy payments that amount to very much more than the statutory minimum. Are we sure that the BSC always spends our money as reasonably as any company in the private sector would be obliged, by its finanial situation, to do? It would be helpful to be given guidance on that matter.
None of us can take much pleasure in the Bill, as my hon. Friend indicated when introducing it. I do not think that hon. Members should be asked to vote these sums unless it is clear that the money is to be well and carefully spent. In all our constituencies and, indeed, in the nation, there are other priorities. I want a new hospital in my constituency. I wish to be certain that the right sums are spent on defence. I want to be sure that the right sums, are spent for social purposes. I want to see a reduction in the debt burden instead of continuing increases. What I loathe most about debates such as this, when we provide huge amounts of taxpayers' money for loss-makers, is the negative atmosphere in which we are bound to conduct them. They are bound, to some extent, to be inquests, and many of us feel that it is a case of throwing more good money after bad.
The fifth report of the Select Committee on the Treasury and Civil Service in this Session shows how fixed capital expenditure at 1980 survey prices has decreased over the years—from £15·8 billion in 1975–76 to an estimated £9·93 billion in 1980–81. As a proportion of total expenditure, it has fallen from 19·4 per cent. to 12·5 per cent. and is expected to fall further. We should be chary of voting so much money for the payment of salaries, administrative costs and so on rather than for items of capital expenditure. We should be looking—to emphasise the note of optimism struck by the hon. Member for Whitehaven and my hon. Friend the Minister of State—to find ways of regenerating the use of steel in our economy.
I should like to see us beginning an economic revival based on capital investment. I have nothing but admiration for Mr. MacGregor and those working in the BSC. I had the pleasure of taking the chair for him at a recent meeting in the House when we were discussing the possibility of a Channel link. I do not know whether hon. Members have had time to look at that possibility, but the project could be privately financed to the extent of £3 billion and would provide 500,000 man years of work. In other words, it would employ a peak of 100,000 men in steelmaking. Would it not be better to discuss that project rather than the negative business of continuing to fund the losses of a corporation, the management of which has, in the words of my hon. Friend the Minister of State, made a continuous series of mistakes?
I should like to see my hon. Friend the Minister of State, with all his energy and competence, and his colleagues in the Government, with the support of all hon. Members, leading a crusade to take down from the shelf


all the capital projects that have lain there for so long and are so necessary, especially those that could be privately funded. Let us get them going and begin the process of recovery.
I wonder whether the House has heard of a young engineer called Robert Moses. Mr. MacGregor reminded me at our recent meeting that Mr. Moses put forward the proposals in the years of the depression in the 1930s that led to the privately funded bridges and tunnels being built around New York. Look how that great city has benefited from that foresight, determination and work.
We all know that the same thing is necessary here, whether we talk of a Channel link, a Severn barrage or whatever. I hope with all my heart that this debate will be the last of its kind. I shall not be willing to vote for another such Bill and I hope thay my colleagues on both sides of the House will take a similar view.
Enough of this negative atmosphere. We have had far too much of it. We need constructive ideas for the future, not to keep men in work for the sake of keeping them in work, but to give them something realistic to look forward to. That is why I shall continue to argue strongly for an economic recovery—capital-led and without inflationary consequences—to give our people the hope that the wretched management of some of our nationalised industries in the past have so little afforded them.

Mr. Donald Coleman: My hon. Friend the Member for Whitehaven (Dr. Cunningham) and the Minister of State expressed the hope that, arising out of the Bill, we would see a reinvigorated steel industry in this country. I join them in that hope, because the Bill is not all bad. We welcome some parts and we will not vote against it. It is a pity that the Secretary of State for Industry was afflicted with deafness this time last year when Labour Members were saying that it was necessary to carry out an examination of the capitalisation of the BSC.
The right hon. Member for Taunton (Mr. du Cann) spoke about things being wrong in the BSC. My hon. Friend the Member for Kettering (Mr. Homewood) probably has more experience than any other hon. Member of the failures of the BSC. Before coming to the House he was a full-time official of my trade union, the Iron and Steel Trades Confederation, and he did not have to look far to find the failings in the corporation that brought about the situation of which the right hon. Member for Taunton rightly complained. The difficulties were not brought about by the working people in the BSC or by public ownership. They were caused by incompetence and lack of reality on the part of those whose management of the industry was highly questionable.
I hope that, now that the Bill is making it possible to deal with the problems of the financing of the industry, we shall see a future for British steel making, but it would be wrong for us to dwell only on that aspect of the measure. My hon. Friend the Member for Whitehaven said that clause 1 and the new clause added to the Bill on Report will wreak havoc with the BSC because they contain the real intentions of the Government.
It is the Opposition's responsibility to make clear the contents of the Bill and how the early part of it will affect the operations of the steel industry, so that when the Government are consigned to the dustbin of electoral

defeat and steps have to be taken to restore our iron and steel industry, nobody will be under any illusion as to what we are talking about. This Government have coined a new word for the English language—privatisation. For insertion in future dictionaries I put forward this definition of the word privatisation: to plunder the assets of publicly-owned utilities.
Clause 1 and the added new clause do precisely that in respect of the BSC. They will permit the corporation to be run down until it becomes nothing but a name. All the massive capital investment which the right hon. Gentleman complained has been put into our great publicly-owned steel industry will be thrown away, and I suggest that it will be thrown away to suit the will of Tory dogma. All this will have been done in a Bill that provides the legislation which is necessary to provide the much-needed finance to meet the massive burden of the interest rates which have crippled the BSC. The price that the Government are exacting is the destruction of the BSC. It will bring about the selling off of profitable sectors of BSC operations. To whom? That is anybody's guess.
The Bill reduces the corporation's duties and responsibilities, which were designed to safeguard the supply of strategic steel to the United Kingdom manufacturing industry and also to ensure the safety, health and welfare of its employees. The Prime Minister often postures about defence. A steel industry is of paramount importance to defence. A potential aggressor must be quietly smiling when he contemplates what this Bill does to the BSC.
The time will come when the Government and the Conservative Party will be swept away. When that time comes, so, too, will come the time when this legislation will have to be swept away, because it will be the duty of those who then have responsibility to look to the health of the iron and steel industry in Britain. Despite all the brave words of the Minister and all the hopes of my hon. Friend, this Bill will make the iron and steel industry very sick.

Mr. Hal Miller: The hon. Member for Neath (Mr. Coleman) will not be surprised if I do not agree with his analysis of the situation. I hope that he will forgive me if I do not take up his argument as I have a personal statement to make. I am about to make remarks that are critical of the Government that I support.
I am a Conservative. I came into politics to play a part in helping in the creation of wealth. I have taken a particular interest in trade and industry—matters in which I have personal experience. It is no coincidence that I represent a constituency where those are the main interests. I come from the West Midlands, a region that has been known as the manufacturing and trading heart of this country.
As a Conservative, I have fought five elections on the platform that the Government's primary duty is to defend the realm, to uphold law and order within the borders, and to maintain the value of the currency. One of the strongest planks in my platform has been that private rather than public enterprise provides the best avenue for the creation of the wealth and the best assurance of those liberties that we in this country hold dear.
I also subscribe wholeheartedly to the Prime Minister's view that we need to bring about a change in attitudes to build economic security, upon which so much else depends. For that reason, I rejoiced in my right hon.


Friend's triumph two years ago, and was proud to be asked to play a part, albeit a minor part on the fringe of her Government, as a PPS, a pride that I am grateful to think that some of my constituents share.
I was particularly happy to serve my right hon. Friend the Member for Cambridgeshire (Mr. Pym) first in his role as Secretary of State for Defence and currently as Leader of the House. He has been a source of great strength and comfort to me, both politically and personally.
This Third Reading marks the end of a sorry chapter in our industrial history. In these past two years of worldwide recession and overcapacity in the iron and steel industry, we have seen taxpayers' money spent by the billion, as my right hon. Friend the Member for Taunton (Mr. du Cann) said. That money has been used to shore up the public sector, to enable the British Steel Corporation to meet foreign competition, and to reorganise and modernise production. However, our taxes and the borrowings have also subsidised competition with our own private firms and helped to make private industry unprofitable, closed plants and cost jobs in the private sector, which has had no help with the expense of modernisation, reduction or redundancy. That uneven and, I believe, essentially unfair approach is even more clearly shown by the more generous redundancy terms that are available to corporation employees and the topping up of their short-time working compensation payments—all out of taxes paid by private firms and individuals who are unable to afford or provide the same terms.
I do not wish to rake over the ashes of Duport or Hadfields or the manner in which negotiations were conducted before the arrival in the Department of my hon. Friend the Member for Chingford (Mr. Tebbit). However, there is a widespread feeling of resentment at treatment considered to be less than just or fair, and certainly far removed from what were thought to be Conservative principles. The steel industry should be viewed as a whole by the Government, and not left solely to the purview of Mr. MacGregor. It was largely that feeling that prompted me earlier in the year to put down a motion on the need for an industrial strategy.
Apart from the resentment that I described, there is loss of confidence in the future among private steel makers. We should remember that there has been investment from abroad in private steel making and in activities downstream. How far will corporation competition be allowed to extend from steel making into rolling, drawing, forging, foundries and stockholding?
Splitting the corporation into Companies Act companies is a welcome step, but how will they be financed, and on what basis will they compete with private firms? The possibility of selling those companies later is welcome, but what comfort will that be to private firms that have been overwhelmed by the corporation previously?
The increases in the corporation's productivity are welcome, but how does it justify better treatment for its employees than for private steel workers with comparable service and performance? Is it not a case once more of unions being able to wield more influence and power in nationalised industries than in the private sector? Is there not a possibility that old scores are being paid off from the steel strike in the corporation a year ago, the strike that did such damage not only to the corporation but to all producers, as merchants and customers turned to imports?

Mr. Homewood: rose——

Mr. Miller: I am sorry, but I shall not give way. I am making a personal statement, as I made plain to the House.
I have mentioned Duport. Its facility at Llanelli was the most modern of its kind in the country. It was diverted to South Wales by act of regional policy. It should have been established in the West Midlands, adjacent to the rolling, drawing, and stockholding facilities for engineering steel. The plant was thus isolated from its market and made less economic because of the transport and reheating costs involved. The West Midlands was deprived of badly needed new investment. Now the Government are even asking for repayment of the grant, although the company was paid nothing for the plant, nor helped with closure costs. The remaining steel interests of Duport in the West Midlands may form part of the projected Phoenix II, to which my hon. Friend the Minister referred, but there is a fear that they will be linked with other BSC facilities rather than combined with the Round Oak output.
The decline of steel, engineering and motor vehicles in the West Midlands again calls into question the Government's policy on development areas. With the fastest rising unemployment in Britain, we believe that incentives should be withdrawn from other regions or extended to the West Midlands.
I have said that subsidies for British Steel are in part to enable the corporation to meet foreign competition. This raises the whole question of trading policy. I yield to nobody in the House in my support for the Common Market and for free trade. I believe that Britain's vital interests are best served by our membership of the European Community and our adherence to the freest trading system possible. But we weaken the case for the Community and public acceptance of it by permitting our partners to dump their products here. There may be a benefit in so reducing the rise in inflation, but the lasting damage to our industry, employment and the cause of a united Europe can more than offset that temporary benefit.
My hon. Friend the Minister has talked of agreements to limit production of steel in the Community and to end subsidies. Well and good, but in the meantime only the public sector is being cushioned against the damage. It is far from clear that the creation of a European cartel is in our long-term best interests.
Why should we not insist on fair as well as free trade? Why should we not pursue, and be seen to pursue, the national interests in these matters, like the French or the Americans? The same considerations apply to other products and to other sources outside the Common Market. Here, surely, we should insist on fair prices and reciprocal opportunities. Yet steel comes in unhindered from a number of areas. Castings flow freely from the Eastern bloc, East Asia and Spain, with obstacles, prices and tariffs that we cannot surmount. On a number of occasions I have urged these arguments in respect of motor vehicles, some of the largest end-users of our iron and steel products. But now it is happening on an ever-increasing scale with those basic products themselves.
Of course we must be competitive, of course we must be prepared to change, but let us see that the competition is fair and that there is reciprocal opportunity. We must be prepared to manage the rate of change to allow the necessary adjustments in our economy to take place at a pace that does not involve socially unacceptable dislocation and disruption.
Those principles of competition should also apply in energy. After months of pressure, the Government set up the National Economic Development Office energy task force, which reported at the beginning of March. Energy costs are particularly relevant to the iron and steel industries, accounting for up to 20 per cent. of operating costs. Competition from imports with different energy cost structures is severe. Some palliatives against further rises were announced in the budget, but nothing has so far been announced with regard to foundry coke, which is of particular significance in those industries.
On a wider front, energy supplies should be one of our main advantages, particularly over our Community competitors. People find it difficult to understand why we seem to have to pay more for our energy than our competitors do. Help has been announced for conversion to coal firing, but more help is needed, paricularly in measures of conservation. The forging industry particularly, needs that for the cladding of furnaces.
I began with a sketch of my constituency and my region. I have rehearsed the principles of Conservative policy that I uphold. From what I have said the House will understand that I do not find the treatment of the private iron and steel industry by the Department to be either equitable or in accordance with Conservative principles, or in the best interests of my region and my constituency. Similarly, I am unable to accept the sense of current policy on energy costs for industry, and I wish to see a more determined trade policy. These policies have caused widespread misunderstanding and resentment amongst our supporters.
I am not a person given to making gestures. Both privately, and, increasingly, publicly, I have sought for more than a year to have these policies changed. I do not believe that they reflect the programme on which I was elected.
Therefore, I have reluctantly come to the conclusion that I must give up my post in order to be able to speak out more freely and to be able to give wider expression to the concerns of the West Midlands. The West Midlands is not only the manufacturing and trading heart of this country. It is also its political heart, where general elections are won and lost. It is therefore vital to promote the prosperity of the region's industry and trade, and to oppose policies that would weaken the West Midlands.
It is clear that the Labour Party has nothing to offer the region. The only prospect that it has held out is of more nationalisation, of higher spending by swollen local authorities, as is clear from its recent election programme. That can only mean more spending, more taxes, more borrowing, more inflation and yet more jobs lost. As one looks at the Labour Benches, it is obvious that there is no alternative to our Prime Minister, but her success will depend on her policies succeeding in the West Midlands. It is on behalf of the West Midlands that I have spoken tonight.

Mr. Bill Homewood: I did not intend to speak in the debate but I have been spurred to do so by two speeches from the Conservatie Benches. The first was the speech from the right hon. Member for Taunton (Mr. du Cann). Although we come from different extremes of society and our experience in this House is different—I

have been here for a short time and he has been here for a very long time—I have always found a kinship whir his economic beliefs. Although on every occasion he speaks he attempts to deny his Keynesian affinity, that is where we have a common cause. Living in the Kettering constituency which contains Corby, I have seen the effects of mass unemployment over the past few months. I recognise that the right hon. Gentleman thinks of economics in terms of people being able to do a job of work and finding a new job when they are put out of work. That is where our affinity lies.
There is no doubt that the iron and steel industry, whether privately or publicly owned, is being torn to pieces, not primarily because of the aggressiveness of the public sector or because its previous inefficiency exalted the private sector, but because there is no longer a demand for either. Both sectors are being pushed into competitiveness which is not desirable for either.
Perhaps facetiously, I have gained some pleasure from the fact that under Mr. MacGregor's influence the BSC has achieved an advantage but the private sector is feeling the pain more than the workers in the public sector. Few public sector workers in the immediate future will be made redundant easily, but private sector workers are feeling the pinch. Initially I felt that that was a recommendation from the Conservatives, but that is not a good point of view and I do not care to carry it too far. I do not want to see any more communities, whether they are served by a public or a private steel sector, put into a situation similar to that of Corby.
The salvation of all of us, as there is still much publicly-owned steel industry left in Corby, lies, as the right hon. Member for Taunton said, in a macroeconomic arrangement. It is nonsense that our steel industry is being run down. What is left is efficient, competitive with everything that the Western World, although probably not the Japanese, can produce. It needs enormous capital investment. Capital investment is required in those areas that are suffering from the closure of steel works.
I have pressed upon Ministers the urgent need for a new road—the A1–M1 link—to give Corby a chance of a rapid rejuvenation. The Ministers say that nothing can be done about that yet. No start can be made until 1983. We have been arguing about that road for years. The steel industry is suffering, and when the steel industry goes out of existence the communities affected suffer because the Government delay the injection of capital into new industry. Without such investment the populace deteriorates quickly in those communities.
However, I take issue with the hon. Member for Bromsgrove and Redditch (Mr. Miller). He wants it both ways all along the line. He argues that the trade union movement has made matters difficult because it demands large severance payments in the public sector. The only reason that those large severance payments were made was that they bought out industries which the Government claim were losing large sums of money—way beyond the severance requirements in a short time. Whole communities were destroyed in six to 12 months because of those large sums of money.
I know Bilston, Bromsgrove and all the area of the hon. Member for Bromsgrove and Redditch because I worked for 12 years as a full-time trade union officer and organised throughout his area. No part of that area has been destroyed as quickly as Corby, Shotton or Consett. The unemployment that the hon. Gentleman is complaining


about now—as he rightly said, he supported those policies when he was elected—nowhere in his area is as high as it is in Corby. He complains about the large payments that the steel workers have received that have propped up the small communities. They will not prop them up indefinitely. The payments will merely tide them over. The immediate problem is persuading new industries to come to the area. The hon. Gentleman is being hypocritical.
The hon. Member for Bromsgrove and Redditch complained that when he was elected he fully supported the Government's policies. Those policies have not changed much. It is no good crying when they do not work. I do not know about the right hon. Member for Taunton, but I know about the hon. Member for Bromsgrove and Redditch. I was in his area at the time and he made a complete commitment to what the Government are now doing. I am sorry, but he cannot now have it both ways. He cannot support tax reliefs, reduction of taxation, reduction of public expenditure, reliance on the monetary system, and a belief that one can withdraw Government intervention from the industrial structure, and then cry out and get squeamish when people are made redundant.

Mr. Hal Miller: rose——

Mr. Homewood: The hon. Gentleman would not give way to me in the middle of his speech. However, so thin is the ice on which he has been skating that I shall give way to him.

Mr. Miller: I am grateful to the hon. Gentleman for his kindness. I wanted to point out to him that I was not trying to have matters both ways. I said that the actions of the Government in this respect had not been in accordance with what people understood at the time of the election, in that huge amounts of money had been poured into the public sector, creating a great strain on the money system and on the tax system. That was not envisaged at the time of the election, and it would not have had my support if it had been.

Mr. Homewood: The hon. Gentleman really tries to have it both ways. What his right hon. Friend the Member for Taunton has been saying, and continues to say, is that what is wrong is that we need some injection of public funds into the economy. I am sure that the right hon. Gentleman will also start to shake his head, but it is not possible to do it in any other way. It is impossible constantly to extract money on the lines that the right hon. Gentleman talks of unless private enterprise injects the same level of funds to keep the same level of employment.
What is coming through is that the priorities are different, in that there is an accent on profits one side and an accent on employment on the other. If there is a difference there about which we can argue, that is fine. However, the hon. Member for Bromsgrove and Redditch agreed with policies of that kind. I saw his election address. He agreed with all that his party was seeking to say at the time. The hon. Gentleman really has no right to say that he will resign.
I am a comparatively new Member of this House, and I become extremely annoyed when Government supporters make such comments. I lived in the hon. Gentleman's area, and I know what he and others said at the time. The policies of the Government are exactly what the Government said they would do. We Labour candidates

said what the consequences would be, and we are suffering those consequences in places such as Corby and Kettering, which had never had unemployment. Today, they have enormous levels of unemployment, way above the national average, because of the policies to which Conservative Members subscribed and which they now seek to deny with such comments as "I shall resign because I cannot agree." Statements of that kind are a load of codswallop. They are nonsense. Conservative Members who take this line should have made up their minds at the time. If they had done so, they would not be sitting on the Government Benches now.
I find a distinct affinity with what the right hon. Member for Taunton said, though after what I have said he probably finds none with me. I am sure we have a common interest. The object of economics in any civilised society must be to maintain the level of employment. That has now become the critical factor. If we do not seek to deal with it along the lines suggested by the right hon. Member—by means of powerful capital investment in the public sector—I do not know where we shall end up, not only economically but socially. I must admit that it is the social consequences that worry me far more than economic consequences.

Mr. John G. Blackburn: There comes a time in public life when one has to stand up and be counted. There comes a time in political life when one has to stand up and be counted. Tonight this House has seen an act of courage and of honour that we have not witnessed for a long time in the personal statement made by my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller). I pay a warm and sincere tribute to him for his stand on this issue. I am sure that his standing in his constituency will be even greater than before as a result. The greatest compliment that I can pay him is that he is a good man, and I am proud to be one of his friends from the same region.
There also comes a time when hon. Members must stand up and be counted, especially in the context of the steel industry. Tonight the House of Commons will be counted when it expresses its reaction to the plight of the steel industry.
I have no intention of going down the pathway of inquests on what has happened in the past and considering whether the fault lies at the door of overmanning, bad management or competing in the wrong markets at the wrong prices. Even at this stage, that is academic. However, it is my prayer that never again will the House have before it on Third Reading a Bill containing a provision such as that in clause 3, with the write-off of £3,500 million.
I was quietly comforted by the excellence of the speech of the hon. Member for Whitehaven (Dr. Cunningham). He sought to build a bridge of common purpose for the benefit of the steel industry which, in the final analysis, is what we are here to discuss.
In the course of a number of speeches in this first class debate, the question of fairness has been brought to our attention. I do not hold the view that in the context of the steel industry and in that of the Third Reading of the Bill we have witnessed fair play to the private sector of the steel industry. I, too, go along the pathway that has been trodden by my hon. Friend the Member for Bromsgrove


and Redditch and point to the subsidies which have been made in abundance to the public sector and to lack of similar subsidies to the private sector.
We have had discussions about a corporate plan. I associate myself with the remarks of my right hon. Friend the Member for Taunton (Mr. du Cann). If I were an investor and the credentials for the corporate plan were placed before me, I would not find the enthusiasm to invest a postage stamp to decline the offer. However, that is historic. The steel industry has gone through a crisis, and we now have Mr. MacGregor at the helm.
There is a very important equation that the House may, to benefit, take a moment to consider. It is a very simple, well-tried and fundamental philosophy that in business and industry the circle of events starts with an order. Order equals production; that equals jobs; that equals profit; that equals further investment; and that equals more jobs. When one has quietly considered this equation over many days, I find it difficult to believe that we can get past the first step, which is the order, because in so many respects orders have been obtained in the public sector, which is subsidised, and the private sector cannot obtain export orders because they attract no subsidy.
One must review the Bill on its Third Reading and say, with sincerity, that the House is showing, in real terms, what it feels about the steel industry by writing-off of these vast amounts of money and debt. I suppose that it could be taken as a vote of confidence in the steel industry that the Government are prepared to say "We shall give you the opportunity to write off the past and look forward to the future".
The concluding moments of my speech are opportune for me to dwell on the future. I believe that the steel industry, which I salute, is looking to the Government Front Bench tonight for an absolute statement that there will be no further delay in the creation of Phoenix II, because the delay and uncertainty that have prevailed against the private sector have meant that no management can possibly plan for the future or develop the markets into which it would like to enter. The steel industry is entitled to ask this question: can the Government indicate this night the future ownership of the companies in the private sector?
In the excellent and memorable speech of my right hon. Friend the Member for Taunton, we heard the detailed argument, step by step, about the loss of market in the private sector. How did that come about? Did it come about because of the brilliance of British Steel, or the excellence of its new chairman, or the enthusiastic endeavours of middle management? They may be contributory causes, but I have the moral courage to suggest that the reason those orders increased was that the public sector was undercutting the private sector with subsidies from the Government.
For the future, I have not only a moral responsibility to the House and to the Conservative Party; I have a greater responsibility—to my constituents. In the final analysis, that must take pre-eminence, because it is through their warm and generous support that I find myself in this House tonight, the only Conservative Member ever to be elected for my constituency. It is a constituency that is dominated by an excellent steelworks with first class men working within it. I salute them. I refer to the Round Oak steelworks at Brierley Hill. From director to

management to worker in the foundry and in the mill they with one voice would say "We are not afraid of competition. We seek competition. We seek competition that is fair, and in fair competition we shall succeed. We shall prosper and we shall be wealth-creating in the difficult situation that the West Midlands is experiencing."
I am conscious of the excellence of the Under-Secretary of State for Industry, my hon. Friend the Member for Arundel (Mr. Marshall), who over many years worked professionally in the steel industry. However, on Third Reading we want some answers. I contend that the House has not been given the full background to the Bill. Matters have been discussed of which we know nothing irrespective of the corporate plan. As for Phoenix II, is it true that the corporation will take the 50 per cent. ownership that is currently in the hands of Tube Investments Ltd? I represent the Round Oak steelworks and I am entitled to ask that question.
What can the Minister tell us about GKN and Brymbo? We have heard a great deal about Duport at Llanelli. I should be trespassing if I went down that path again, because the issue has already been discussed at length. What about Lonrho and Hadfields? There is surely some information to be given on that score. Before passing the Bill and spending so much money from the public purse, these are pregnant questions that deserve answers.
If the House divides, I shall be prepared to support the Government. However, I give a warning. I do not want to be invited similarly to support them. The Government have saluted the steel industry by introducing the Bill and the House will do likewise if the Bill is enacted. I believe in the good faith that exists in abundance in the industry, and I am confident that the fine men in it will respond to the challenge. I hope that the Bill will be given a Third Reading. We must not reflect on the past, and we must look forward with hope and assurance to the future of one of our basic and prime industries.

Dr. Jeremy Bray: I apologise for having missed the Front Bench speeches and that of the right hon. Member for Taunton (Mr. du Cann), as I was unable to be in the Chamber at the time. The hon. Member for Bromsgrove and Redditch (Mr. Miller), who has just left the Chamber, made what is always a difficult speech with dignity and obvious feeling. I agree with him that the private sector has been badly treated and also about the need for fair as well as free trade. I understand the pressures that lead to the resignation of any hon. Member from any kind of office, but I fear that the hon. Gentleman's travail is not yet over and that he, the hon. Member for Dudley, West (Mr. Blackburn) and many other Conservative Members may find that they have to press their disagreement with the Government to the Lobby before any notice is taken of them.
I make one brief point about the Bill. We tried in Committee to press for proper information on the crucial clauses 2 and 3, which carry out the financial reconstruction. By repeated questioning we were able to get some statement about the principles underlying the valuation of the assets of the corporation. Finally, we were able to discover what a closer reading of the Bill and of previous annual reports should perhaps have brought to light earlier, namely, that on the liability side the


corporation will be left with no fixed-interest debt at all. The British Steel Corporation will now have no interest charges to pay. That is an extraordinary arrangement.
I well understand the feeling of ignorance which no doubt exists in the Department about how the corporation's total debt will turn out when it gets back into profit. Nevertheless, the Secretary of State could at least have laid down some principles about the gearing that he proposed and ensured that at least some of the debt bore interest. I say this as a Member representing many thousands of steel workers and a major investment of the BSC at the Ravenscraig, Craigneuk Dalziel and other steelworks. It is not in the interests of the steel workers that the BSC should effectively have access to free capital. It means that borrowing by the corporation must come out of the same kitty as public authorities' expenditure—the money needed for the day-to-day wages of public sector workers, the running of the health and education services, and so on.
The BSC, like the other nationalised industries, is a commercial venture and it should be expected to operate commercially. It is in the interests of steel workers that it should. The inevitable result of this treatment of the corporation's borrowing will be that, like the public sector and the other nationalised industries, when in the future it has a good commercial case to make it will be told by the Secretary of State and the Chancellor of the Exchequer that it cannot have the money that it requires because it comes out of the same kitty and adds to the public sector borrowing requirement in exactly the same way as any other kind of public expenditure. That is simply not in the interests of the corporation and its workers.
I am sure that this matter will be pursued in the current inquiry by the Select Committee on the Treasury and Civil Service into the financing of the nationalised industries. I hope that we shall then require much fuller information on both the asset and liability sides than Ministers have been prepared to give to the House and the Standing Committee during the passage of the Bill.
I hope that the Bill will receive a Third Reading. The capital reconstruction is necessary, but the manner in which it has been carried out is appalling.

Mr. Roger Moate: I understand from earlier remarks that there will not be a vote on Third Reading. Nevertheless, I do not think that anyone who has listened to the speeches from the Conservative Benches could have failed to recognise that this is a traumatic occasion for many Conservative Members.
The speech of my right hon. Friend the Member for Taunton (Mr. du Cann), the very courageous speech of my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller), and the speech of my hon. Friend the Member for Dudley, West (Mr. Blackburn) are an indication of the depth of feeling on the Conservative Benches. Many of us—and I am one of them—feel a sense of bitterness and failure at the fact that we have this legislation before us tonight. The Government were not elected to preside over the reduction of the private sector of the steel industry, yet that is what we have seen. We were elected to withdraw the frontiers of the public sector and to press forward the private sector, but we have seen the very reverse of that policy.
I am sure that in one respect at least there is no divide between the two sides of the House. We might argue about

the differences between private enterprise and the public sector, but everyone shares the sense of tragedy when there is a closure of steel industries or a reduction in the steel sector in a constituency, whatever the ownership
It is a greater sense of tragedy when we see a private sector company go under, because the private sector has built itself up in recent years against all the odds. It has striven against the enormous weight of the public sector. It has passed all the tests of high productivity, of efficiency and of efficient investment that we should like to see applied to enterprise of every kind. These are the criteria which have been applied to the private sector. It is these highly efficient units that have suffered in the last two years in particular from the immense competition of the public sector and, of course, faced with the enormous problem of the recession.
I speak with great feeling because in my constituency I have the steel mill of the Sheerness Steel Co. I do not think that any hon. Member, Labour or Conservative, could fail to be proud of that enterprise or to have immense admiration for the management and the work force who in the last few years have turned that steel mill from nothing into one of the most successful industries of this country.
I pray that the company will survive. It has faced redundancies and short time working and is losing money. I believe that it will survive. But there is no doubt whatever that it is going through critical times. The problems that it faces are typical of those that have been faced by Hadfields, by Duport and by other parts of the private sector. This is a real tragedy, and the Minister of State must also feel a sense of pain that it is under a Conservative Government that we have faced this disastrous decline of the private sector.
The growth of the private sector was a testimony to the strength and principles of free enterprise, so that it is a particular pain to us when we see it suffering as it has in the last two years. I do not blame the Government entirely for this predicament. The major factor is the recession and the dwindling or even disappearance of the markets. It was inevitable that the private sector and the public sector would suffer equally in these difficult times. Nevertheless, the Government, by bailing out the public sector, as they had to, thereby contributed very substantially to the problems of the private sector.
Having taken the first action, as the Government were honour bound to do, to help the public sector, they failed to understand the consequences of that action for the private sector and have left it to suffer those consequences. They should have done more and should have stepped in earlier to help.
My hon. Friend the Member for Bromsgrove and Redditch referred to energy costs. I do not believe that we would have the Bill today if the Government had acted more promptly on certain matters, including energy costs.
Eight or nine months ago many hon. Members were telling the Government that there were serious major discrepancies between the energy prices being paid by steel producers in this country and their main competitors on the Continent. At that time the problem was brushed aside. Months later, the Government produced the NEDO report, but it took many months to get it, the Government having denied for some time that the problem existed. The NEDO report said that there was a 30 to 35 per cent. discrepancy between those industrial energy costs. That means millions of pounds a year to many steel mills.
What has happened? The Budget was supposed to contribute about 8 per cent. as a reduction of energy costs, but even that has not materialised. Steel producers still face increasing energy costs. Unless something is done about factors such as that, the private sector will not stand much chance. I ask my right hon. and hon. Friends to take urgent action in an area where they can have some influence and direct effect.
We understand that Mr. MacGregor has undertaken to investigate any complaints by the private sector about alleged undercutting of prices by the British Steel Corporation. This is very much a cosmetic exercise. I have no doubt that any blatant examples will be investigated and that action will be taken. But how can the private sector hope to compete against a corporation which has £1,000 million of taxpayers' support in a single year? It is not specific examples of undercutting, but the general ability of the corporation to absorb losses on a massive scale which counts. In a recession such as we have experienced, if the BSC had been unable to absorb those losses, many private sector companies would have been able to increase their production and share of the market. But they have not been able to do that. They have lost markets at home and abroad in the face of the BSC's competition. As a result, many now face bankruptcy and liquidation.
We are told that investigations will be made and that we are not to worry about unfair competition of that kind. But I believe that unfair competition will continue as long as the taxpayer is ready to put his hand into his pocket and pay out the sums about which we are now talking.
We have been told that one object of the Bill—and I welcome it—is to ensure transparency of competition and fair competition so that we know where the taxpayers' money is going and the extent to which the BSC is being subsidised. I have to come back to the point that I have put to my hon. Friend on a number of occasions. That may in future be true about the BSC—although I am not too sure of that—but what about the new Phoenix companies? We are supposed to welcome these little Phoenixes which will spring up from the ashes. I fear that they are not Phoenixes, but the tentacles of a State octopus. We shall see these quasi-State companies still linked to their parent company and able to obtain transfusions of money from the centre.
I come back to the point that I have put before about Allied Steel and Wire. It will have an almost monopoly position, although it was set up in such a way that there was no prospect of referring it to the Monopolies and Mergers Commission. It has been established with a direct link with the British Steel Corporation. Therefore, we are entitled to know how much money will be available to that new organisation to enable it to sustain losses in the first year of its life in order to capture the lion's share of that section of the market. We are entitled to have that information.
If there is to be fair competition, and if we are to know how much public money is going into such bodies, we should be given the facts and figures when the Phoenix companies are set up. I understand that it might not be appropriate to let us have the facts and figures when negotiations are taking place on the price of assets. However, as soon as the deal is made, my hon. Friend will be under a duty to tell the House how much taxpayers' money has been put into each of the new Phoenix

companies. If we are not given that information, we shall not have faith in the claim that there will be true and fair competition between public and private sector companies. The steel industry has had a disastrous two years. In addition, those two years have been disastrous in terms of the damage done to the faith of the Conservative Party and to the faith of Conservative Back Benchers. We have seen proud, successful and efficient companies go under, or standing in danger of doing so, because a Conservative Government have given subsidies to the State sector and because of the problems involved in a recession. The Bill could provide the basis for re-establishing faith if it creates genuinely viable and unsubsidised private sector companies. However, at this stage, we are dependent on an act of faith and on pure optimism.
We want more evidence to show that what the Minister says may happen will happen. We want more evidence to show that we might return to a genuinely independent and viable steel industry both in the public and private sectors. My hon. Friend's refusal to give the basic information that I have sought has shaken my faith. I have a jaundiced view of the Bill's Third Reading. I regret that there will not be a vote on it. If there had been, I might well have gone into the Lobby to vote against it.

The Under-Secretary of State for Industry (Mr. Michael Marshall): The debate has been interesting. The hon. Member for Whitehaven (Dr. Cunningham) was temperate and moderate. He probably saw the storm clouds gathering behind me and was content to let the fire come from whither it may. I differ from the hon. Gentleman on one basic point. He suggested that by imposing cash limits the Govenment were in some way culpable and had virtually encouraged the strike in the steel industry. It is interesting to note that when Labour Members are in Government they strongly advocate cash limits. Indeed, to a substantial extent they built up that system in the industry. However, when our party is in power those cash limits suddenly become unreasonable and are in some way guaranteed to lead to strike action. As the hon. Gentleman knows, at that time the management believed that it could not justify the wage increases urged upon it. That argument is often heard. However, the hon. Gentleman took the issue out of context.
It is clear that the main thrust of the debate has come from several of my hon. Friends. They reflect genuine and deeply felt concern about the future of the steel industry, particularly the private sector. There is a difficulty about debating such matters. During such debates we recognise the familiar faces of the "steel gang" and of a number of regulars. Over the years we have enjoyed a certain camaraderie. Across the Floor there is a feeling that we are all trying to do the best that we can for our steel industry. In a powerful speech, my right hon. Friend the Member for Taunton (Mr. du Cann) made that point. I share the admiration that he expressed for those who work in both the public and private sectors of the steel industry.
My right hon. Friend suggested that we needed to get the best deal possible for both sectors of the steel industry. I am at one with him on that but we face a difficulty when we discuss the means of achieving it. If I have to jib at the remarks of some of my hon. Friends it is because—with no disrespect to the powerful feelings that they have—


they are inclined to see the issue in black and white and to imply that if only the BSC had not done certain things the private sector might flourish.
We must remember the problems caused by the world recession. In the Community alone the estimated excess capacity is over 40 per cent. My hon. Friend the Member for Faversham (Mr. Moate) mentioned that towards the end of his speech, although there has been a tendency to leave that aside and to regard the BSC as the chief protagonist.
We must try to strike a fair balance. It is reasonable to ask all hon. Members what they would do that is different to try to put the balance right and keep the industry viable. My hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) did himself less than justice when he said that import competition had been allowed to drift. My hon. Friend the Minister of State is deeply involved in negotiations in the Community to seek to achieve a balance, whether on prices or quotas, to put some stability into a market that is suffering substantial overcapacity.
The House listened carefully to my hon. Friend the Member for Bromsgrove and Redditch, as it always does when an hon. Member makes a personal statement. My hon. Friend knows of my respect for him, over several years. I listened to him with care. I understand much of what motivated his speech. He should reflect on some of the problems involved in trying to help a great industry during a world recession which is on an unparallelled scale and beyond our experience in the post-war years.
My hon. Friend said that access to capital was available to the British Steel Corporation. That goes to the heart of the matter. We have to accept that, by definition, a Labour Party nationalising an internationally competitive manufacturing industry gives it at one fell swoop an advantage that no private sector company can enjoy, namely, that in difficult circumstances it has a bank of last recourse that is not available to the private sector. That problem cannot easily be set aside.
I hope that my hon. Friends will see—as did some Opposition Members because they argued against it—that one of the merits of the Bill is that it increases the opportunities for privatisation and begins to move to the only real answer—the injection of private capital and commercial disciplines on a more direct and accountable basis than is possible in a nationalised industry.
My right hon. Friend the Member for Taunton said that he welcomed the Companies Act structure for Redpath, Dorman, Long. I am glad that he sees that as a step in the right direction. We welcome anything that will take that further down the private route. It is still early days. If it goes ahead we should look for something which, once more, will achieve a majority in the private sector, as in the case of Allied Steel and Wire. My right hon. Friend might have added that British Steel Stockholding is following the same route. We believe that to be a step in the right direction, not only as a first stage towards privatisation, but as a more accountable way for that company to act and to make its activities known to the public.
My right hon. Friend asked for a progress report on the state of the corporation. That was a helpful and fair suggestion.

Dr. Bray: The Minister referred to the difference between the public and private sectors in terms of access to finance. Does he appreciate that it would have been

possible to seek some alignment by which the private sector was given parity of treatment with the public sector in the dramatic cycle that it has experienced? Government Members argue that the private sector should have been helped. My hon. Friends recognise that there is an obligation on the BSC which should be represented in the interest charges that it is called upon to pay. It is because of the inconsistency in the treatment of the public and private sectors that Ministers are making such a cock-up of the industry.

Mr. Marshall: I shall come to the hon. Gentleman's contribution. I fear that he is inaccurate about these matters. On the basic question of additional assistance to the private sector, I would point out that there is assistance for capital projects under sections 7 and 8 of the Industry Act 1972. As my hon. Friend the Member for Bromsgrove and Redditch knows, offers have been made to the private sector following the principle that is also applied in certain parts of the motor industry. To suggest that there is some way of matching for the private sector the assistance that is built into a nationalised manufacturing industry in trouble is to take us down a substantial road. It: is misleading to imagine that help can be confined to the private steel sector without having implications for the whole of British industry.
My right hon. Friend the Member for Taunton asked for a review of the BSC's position. It was helpful that Mr. MacGregor gave some indication of the results achieved by the corporation in the first three months of the year when he appeared before the Select Committee on Industry and Trade on 13 May. His report is borne out by our own monitoring of the BSC's progress. During the first quarter that immediately preceded the starting point of the 1981–82 corporate plan, BSC's operations showed a modest improvement. Production and delivery of steel increased broadly in line with the BSC's expectations, although the improvement in output and deliveries owed more to exports than to the home market. Prices still remain weak.
Considerable progress was made in closing excess capacity and reducing manpower as required by the corporate plan. There are no signs so far that BSC will exceed its external financing limit for 1981–82. It remains essential that the BSC should continue with the cost reduction programme envisaged in its plan, that this should be carried out successfully and that there should also be some improvement in steel prices in this country and in export markets if the corporation is to get, as is hoped, to anticipated break-even next year.
In July the Government will receive from Mr. MacGregor a report on the first three months of the 1981–82 financial year. This has been said to be a check-point, beyond which he will want to reappraise the BSC's plan. This report will be used to assess progress against the corporate plan and should enable the BSC and the Government to discuss whether any significant change:3 to the plan will be necessary.
My right hon. Friend also asked what could be done in matters such as redundancy payments, the temporary short-time working compensation scheme and similar matters. As he will be aware, there is a real problem. These matters are part of the negotiations taking place between the BSC and its trade unions. They will have to


be concluded in order to facilitate the closure and redundancy programme that is, sadly, a major part of the steel industry scene.
This is part of the great problem that has faced both the public and private sector. If, after the last general election, the Government has been discussing the idea that there should be 50,000 redundancies within the BSC in 1980, and a further 20,000 in 1981, my hon. Friend the member for Bromsgrove and Redditch might have agreed that this was an enormous scale of rundown, especially when one recalls the difficulty experienced by the BSC from those who, aided and abetted by some Opposition Members, were opposed to a progressive rundown when conditions were more favourable for carrying through such a programme.
Therefore, the burden of part of my argument in response to my hon. Friend the Member for Dudley, West (Mr. Blackburn) and others is that it is not fair to suggest that the burden has been heaped entirely on the private sector. The burden of redundancies has been unpleasant and tough and has hit both sectors of the industry, which have faced massive excess capacity, certainly within the European Coal and Steel Community.
The House recognises that my right hon. Friend the Member for Taunton has properly sought to debate the question of engineering steels. We know of his anxiety for the future of that sector, but he knows that the closures at Bilston, Hillside and Templeborough have resulted in the loss of 1·4 million tonnes of capacity and 7,000 jobs. I do not seek to make a direct comparison, but closures at Llanelli and Hadfields would involve about 700,000 tonnes and 3,000 jobs. I mention the figures to show that the numbers involved are substantial on both sides of the equation. I know that no one takes any pleasure from that.
The hon. Member for Motherwell and Wishaw (Dr. Bray) has not got the picture right. The BSC still has a foreign loan debt of £700 million which has to be repaid at a current rate of interest of about 10 per cent. and there is still about £350 million of short-term debt. The national loans fund figures have been written off. The hon. Member for Motherwell and Wishaw is rowing a lonely canoe. I admire him for that, if for nothing else. His hon. Friends in Committee, including the Opposition Front Bench spokesman, asked why we had not accelerated the process of writing off the NLF debt. Previous Governments hoped that the viability of the BSC would be nearer to realisation before capital reconstruction could be carried out. We have had to make a judgment on what debt the corporation could carry and maintain any hope of viability. Those are the facts.

Dr. Bray: I appreciate the Under-Secretary's difficulty in trying to set out a complete balance sheet from the Dispatch Box, but that balance sheet should have been given to the House before the Bill was introduced.
On the question of the outstanding debt—£700 million overseas debt and £350 million short-term borrowing—are those figures arrived at simply on the basis of the accident that they happen to be the overseas debt and the short-term borrowings, with no consideration of what should be the gearing in the BSC between fixed interest and equity?
Does the hon. Gentleman accept that, although the Opposition have often argued that nationalised industries have been subjected to inappropriate debt burdens and

capital structures, if, when it comes to the point of making a capital reconstruction, sound principles are not put forward by Ministers, that will result in further complaints in future?

Mr. Speaker: Order. I had called the Minister to speak.

Mr. Marshall: The hon. Member for Motherwell and Wishaw is active in these matters and once he gets the bit between his teeth he is enthusiastic. I try to go out of my way to appreciate the hon. Member's contributions, because we have talked about steel matters for a few years, but much of the information to which he has referred was available in the annual report. He made a song and dance about it in Committee and sought to carry it on tonight.
I have described the judgment that we had to make. The questions that the hon. Gentleman is raising would have been more properly looked at, in their correct perspective, if he had supported us when, in Opposition, we argued that the matters should be looked at when we began to move away from the basic principles of sound accounting. The gradual movement away from traditional forms of financing over several years has caused difficulties. Those of us who were involved in the proceedings on what is now the 1975 Act remember the many arguments that took place at that time. If the hon. Gentleman had been consistent he would have joined us in opposing those measures. He has only suddenly acquired sound financial principles.
I want to comment on one or two of the more misleading pieces of advice that were given by the Opposition.

Dr. Bray: I appeal to you, Mr. Speaker——

Mr. Speaker: Order. The hon. Member for Motherwell and Wishaw (Dr. Bray) is appealing to me, but I am not addressing the House. I am sitting innocently listening and learning.

Mr. Marshall: I must get on. I want to try to put straight some of the misleading advice that was given by the Opposition. We enjoyed having the hon. Member for Neath (Mr. Coleman) in Committee, but there is always a slight danger when a talking Whip begins to cut loose. Tonight he gave one of his more powerful orations—a very dangerous potion. I respect him as an Iron and Steel Trades Confederation man, and he speaks a lot of common sense. It is a pity that he covers up the sense for most of the time when he comes back to the Floor of the House on Third Reading. He tried to put the blame for the ills of the corporation on the management of the British Steel Corporation. That was not particularly helpful. Indeed, his argument ran smack into the arguments of his hon. Friends, who said that various parts of the corporation had been consistently well managed. They should get their acts together.
In a more direct way the hon. Gentleman attacked the principle of privatisation, which is one of the most important aspects of this measure. In the Bill we have sought to accelerate the process of 50-50 public-private enterprise in the private sector. We as a Government have maintained that principle in a number of measures. We have already done so with British Aerospace, and there are the forthcoming measures affecting Cable and Wireless, the National Freight Corporation and the British Transport Docks Board. For people who take a serious interest in


industrial matters, the principle of that kind of joint venture is worthy of serious consideration. It is part of the answer that I give to my hon. Friends who are concerned about some of the problems of the private sector. The key issue is that these companies—Allied Steel and Wire has been the first example of the Phoenix range—are in the private sector.
Here I come to the question raised by my hon. Friend the Member for Faversham in his diligent, if not persistent, manner. I accept that he wants to understand the matter as clearly as possible, because I know of his close concern and interest in the Sheerness Steel Company in his constituency. I must point out to him that we are speaking here of a private sector company, and because it is a private sector company the Government take the view that they cannot discriminate against it as opposed to any other private sector company. Therefore, the company must be left free to come forward, as it must do, with proper accounting principles in its accounts within seven months of the end of its first year's trading to state its position. That is the only answer that I can give my hon. Friend. I accept that he is not happy about it, but I must be consistent.
The hon. Member for Kettering (Mr. Homewood) raised another matter in what I considered was a rather constructive speech. He fairly pointed to the limits in steel demand and to the shared problems of redundancies, and so on. He slipped into political rhetoric at the end, but, in general, the sight of the hon. Gentleman seeking and finding common ground with my right hon. Friend the Member for Taunton is something that I am sure the House enjoyed. I pay my respects to him for what I thought was a helpful contribution.
My hon. Friend the Member for Dudley, West also looked for common ground. He praised the Opposition

spokesman, the hon. Member for Whitehaven, who then looked slightly embarrassed. However, that is something to which we can become accustomed. We are naturally keen to see further progress in the development of public-private sector joint companies—the Phoenix range. I am sure that my hon. Friend will understand that I cannot help him or others who ask for a total progress report. Such reports involve a number of private sector companies as well as the British Steel Corporation. They involve confidential discussions, and it would not help if I were to intervene in that way.
My right hon. Friend the Member for Taunton said that he did not wish to intervene in the corporation's management, and in this he was reflecting a dilemma. I fully respect his and other hon. Members' right to try to obtain the best possible information, but the Government have the difficult task of trying to reach a balance between what is appropriate in examining a measure such as this and intervention in the corporation's management.
I know—I have argued this myself from the Opposition Benches—that we all want more information when we wish to carry our argument forward. That is what the House is all about. I have tried to help my right hon. Friend and other hon. Members, not only tonight, but throughout the Committee proceedings. Anyone who reads the Official Report of the Committee proceedings will find that the general tenor of the debate, while reflecting the anxiety on both sides, was constructive.
We do not wish to return to the House with write-offs on this scale. We believe that the Bill will help us move towards a better balance between the public and the private sector, and therefore I commend it to the House.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Orders of the Day — Common Fisheries Policy

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Alick Buchanan-Smith): I beg to move,
That this House takes note of European Community documents Nos. 11626/80 and corrigendum 1 on the social aspects of the Community sea fishing sector, 4884/81, 5361/81 on quotas, 5304/81, 5360/81, 5362/81, 6021/81 on total allowable catches and surveillance zones, and the Ministry of Agriculture, Fisheries and Food's unnumbered memoranda of 9 February 1981 on quotas, of 28 April 1981 on Swedish registered vessels fishing in the waters of member states of the European Community and of 11 May 1981 on Faroese fishing in the waters of member States of the European Community; endorses the view that social measures, particularly in relation to working conditions and remuneration, are best left to the discretion of national authorities, and supports the Government's aim of securing an early comprehensive settlement on a satisfactory revised common fisheries policy.
My speech could be rather shorter than the motion, though I expect it to take slightly longer. I hope that I shall have the opportunity later to catch the eye of the Chair to reply to any points that are raised.
I should like to deal first with the document on social matters, No. 11626/80 and corrigendum 1, because that is likely to come up for discussion on 9 June in the Social Affairs Council. Therefore, in some respects it has more immediate relevance than some of the others that are very important, as it comes up first for discussion.
The document, which covers a number of items, starting with the important matter of training, is in two parts. The part that deals with matters of training, being in the form of a draft resolution, is simply an expression of the Council's intentions. The remaining parts of the document are an expression of the Commission's views. I make that distinction, because it helps in understanding the relevance of the document.
The main purpose of the first part is to try to increase and improve vocational training for fishermen. If it were adopted, the draft resolution would have little effect on practice in the United Kingdom, because we already have the Fisheries Training Council, which was established nearly three years ago, in November 1978. Training is already available. Both the industry and the unions are represented on the council.
I pay tribute to the work of the council, but what is significant about its work is that it already has set up 12 training associations in all parts of the United Kingdom. By the end of this year it hopes to set up a further six so that all the main fishing areas of the United Kingdom will be covered by training associations. This is a means by which, with the co-operation of the different parts of the industry, we are setting an example to the rest of Europe.
The document deals with the question of employment. It calls on the Governments of the Community to seek to balance the supply and demand for labour in the fishing industry. That is not easy to do in that sector or in other sectors, however much one expresses it as an objective. This is an area which, in the United Kingdom, we already have the extremely active agencies of the Department of Employment. There are many unemployed fishermen in relation to the number of vacancies, but it is of considerable significance that last year the agents of the Department of Employment were instrumental in placing 1,219 fishermen in jobs. That shows how the United Kingdom is already active in this sphere.
The document goes on to deal with matters of health and safety. Fundamentally, those are the responsibility of my right hon. Friend the Secretary of State for Trade. The document deals with such matters as construction, equipment standards, promotion of safety, avoidance of accidents and co-ordination of rescue.
This is a sphere in which the United Kingdom Government and different Departments and various international agencies, such as the International Labour Organisation and the World Health Organisation, are active. Our concern is to avoid duplication by yet another body. Where one has over-duplication and multiplication, what may start as reasonable and sensible objectives can be hindered by too much activity by too many different bodies.
The document on social matters deals with the working conditions of fishermen. It is significant that the conclusion of that section of the document is that it is not appropriate for Community intervention involving industrial relations in an industry so diverse as the fishing industry. We agree with that point of view. We think that it would be better left to the individual member Governments of the Community.
In relation to earlier proposals about working conditions fear was expressed among our share fishermen that that could become an interference with the practice of share fishermen. We would view that extremely seriously. It is interesting that, following representations made by the United Kingdom Government and our industry, the proposals from the Community have been revised. Those fears can be laid to rest. There can be no question of threatening the future of share fishermen. We would ensure that there would be no threat.
We are dealing with most important matters. This document and our policy on it have been communicated to the fishing industry for its comments. The catching organisations support the line that we are taking. We have had no objections from any of the other organisations that have been made aware of the document and the United Kingdom Government's policies.
I turn to what is probably much more at the heart of the debate, and it is a very important aspect. It concerns, of course, a common fisheries policy generally. Our last main debate on this was on 26 November 1980, when we discussed EEC documents. However, there have been a number of other occasions when the matter has been raised in the House because my right hon. Friend has reported to the House after each Council meeting—in December, January, February and then the following two occasions on which we met in March. At the same time, we have had opportunities to discuss many of these other matters in other contexts, not least on the Fisheries Bill. But, specifically on documents from the Community, this is the first opportunity for a debate that we have had since November, and I welcome it.
As my right hon. Friend described on 18 December after the Council of Ministers meeting, we got very close to agreement in the Council on a possible common fisheries policy. At that time, however, agreement was not possible because of the inflexibility of the French Government. As the House knows from statements made to the House by my right hon. Friend following subsequent Council meetings, the French attitude has not changed significantly since.
That brought us to the meeting of 27 March, at which it became clear to the Presidency of the Council and its


members that it was unlikely that further progress could be made on a common fisheries policy until after the French election. The Presidency of the Council proposed at the meeting on 27 March that he would reconvene the Council only when necessary preparations could be made and it was clear that there were better prospects for progress. The way that events have moved following the election in France and with the change of Government, clearly this will mean progress being delayed still futher, although we shall of course press at the appropriate stage for the earliest possible reconvening of the Council to get a satisfactory solution.
Equally, I must tell the House that it would be very foolish to reconvene the Council to discuss a common fisheries policy until we were clearer about the attitude of the French Government and when we could be sure that the necessary preparations had been done. To go into a council without the necessary preparations being done would not help and could make matters more difficult.
For the purposes of this debate, therefore, I simply make it clear that the Government's objectives remain as we have stated them previously. I emphasise again that it is essential that we obtain a comprehensive settlement in which we see agreement on the different elements contained in that settlement. Some of them hang together. Some items can be dealt with on an individual basis. But broadly there are certain elements which are central to a renegotiated common fisheries policy, and it is important that those are brought together in a comprehensive settlement.
Basically, they affect matters of access, quotas, conservation and, last, but not least in this short catalogue, the very important question of policing. Unless we make sure, especially in respect of quotas and conservation, that we have effective policing on a Community basis, as events have unfortunately shown hitherto what may be agreed on a less formal basis is very much less likely to be effective.
the documents before the House deal with a number of these matters. Perhaps the most important one is No. 5361/81 concerning basic regulation for a common fisheries policy. It deals with conservation, total allowable catches and quotas, and these three items are covered by separate proposals.
On quotas, the document lays down certain principles on which catch quotas should be calculated. But what gives me cause for concern is that the document only lays down the principles as applying up to 1982. The principles for years after that are left open for further discussion. that is very unsatisfactory. If there are to be principles—there are principles in any calculation of quotas—it is important that when these quotas are agreed there should be some staying power, some continuity, in their basis. That is particularly important to the industry, because no business or industry can go into the future without some certainty about the framework within which it will have to work.

Mr. Robert Hughes: Surely the hon. Gentleman is being totally unrealistic if he expects principles to be accepted beyond 1982, when the new common fisheries policy is yet to be agreed. The one depends upon the other.

Mr. Buchanan-Smith: The hon. Gentleman may be surprised to know that that is what the whole operation is about—to agree these principles. I am sure that he would

agree that to have this for just a two-year basis would be unsatisfactory. We are seeking agreement for a greater distance into the future in order to give the industry a greater degree of certainty.
This basic regulation deals also with the temporary continuation of the various access derogations agreed under the Treaty of Accession. It also deals with the question of a licensing system to regulate certain coastal fisheries. In both respects, when dealing with questions of access, we do not believe that the proposals meet the needs of the United Kingdom. Before they can be acceptable, particularly in relation to the two important matters of access, this document will need substantial revision.
Documents Nos. 5304/81 and 6021/81 deal with total allowable catches. These follow, basically, scientific advice from the International Council for the Exploration of the Sea. With one exception, the proposals are broadly acceptable to the United Kingdom. The one exception is certain proposals for a limited TAC for herring in the North Sea. This is not based on scientific advice from the International Council for the Exploration of the Sea. For that reason, it is not acceptable.
Document No. 4884/81 deals with the matter of quotas. We have had previous papers in relation to quotas. This one deals simply with quotas on a global basis. It gives no indication of how those quotas will be divided up on a stock-by-stock basis. Not having such a division makes it impossible to assess the implications of those quota proposals for the United Kingdom fishing industry. It is, therefore, impossible to take a view on those proposals at present. By a "stock-by-stock basis" I mean the areas in which the fish are caught, the kind of fish, and so on, because that is the only way in which one can properly assess the value to our industry of those quota proposals.
Document No. 5362/81 deals with fishing plans. It is of particular interest since it deals with the very important matter of preference outside an exclusive zone. The Commission's proposals are confined simply to a zone off the North of Scotland. They simply describe it as a zone in which there might be some special form of surveillance. In respect of the extent of cover and the kind of surveillance—I use the word "surveillance" advisedly rather than "control", which there must be in areas if we are to have fishing plans, and which was an integral part of the Commission's discussion papers on this matter al an earlier stage—we believe that this document, as it stands, is insufficient and unsatisfactory.
On general matters, there is the question of conservation. Document No. 5360/81 simply brings together a number of technical measures which previously appeared in other documents. Broadly, they are based on scientific advice. With the exception of some details in relation to herring by-catches, they are acceptable to us.

Mr. J. Enoch Powell: Will the Minister explain what appears to be a puzzling contradiction in document No. 5360? The document purports to be concerned with conservation measures that have hitherto been appendices to the decisions on total allowable catches. Nevertheless, article 7 of the appended document deals with non-allowable fishing for herring. Article 7(2) prohibits fishing for herring in 1981 off the East Coast of Northern Ireland. As this matter is apparently still open for decision in the context of the 1981


season, why should an article that gives a blank negative be attached to proposals dealing with the general principles of conservation?

Mr. Buchanan-Smith: With the agreement of the right hon. Member for Down, South (Mr. Powell), I shall consider that issue and deal with it at a later stage in the debate. I am grateful to him for drawing it to my attention. If there is an apparent contradiction I should like to consider it further.
There remain the unnumbered memoranda on fishing by the Farces and Sweden, which are basically the external arrangements. In general and in a technical sense these documents, as the explanatory memoranda explain—we do not yet have the full text—are satisfactory in outline and in principle. However, we are concerned about the level of reciprocal quotas that the European Community has negotiated with the Faroe Islands and Sweden. These arrangements give certain access to waters of third countries for fishing purposes and give to the Faroe Islands fishermen and the Swedish fishermen opportunities to fish in waters of member States of the Community. We believe that the balance is unfair with Faroe. Anyone who has any experience of fishing off the Faroe Islands will know that the Faroe Islands Government have put certain restrictions on access to certain areas. These restrictions have made it difficult for British fisherman to catch their quotas. We are concerned about the attitude of the Faroese Government towards salmon conservation, which is an item of especial importance.

Mr. Barry Henderson: Is my hon. Friend able to give an assurance that the rather special and long tradition of line fishing off Faroe is being taken into account in the negotiations?

Mr. Buchanan-Smith: I am aware of that issue. Some of my hon. Friend's constituents have written to Ministers on that very matter. That is something that we shall bear in mind. At present there is no agreement and no fishing taking place. I cannot say what the answer will be because there is no current agreement.
The feature that worries us about the Swedish agreement is the North Sea herring quota of 1,000 tonnes for Sweden. It is premature to offer a quota to Sweden when there is not a Community agreement on the herring fishery.
I have endeavoured to deal fairly swiftly with the documents before us. I am certain that a number of questions remain unanswered. There are matters of great importance contained in the social documents and those on the common fisheries policy. The social documents are relevant because they will shortly be discussed in Europe. It will be helpful to have the endorsement of the House. I am sure that the House will regret that more progress has not been made in recent weeks on the common fisheries policy. It is now clear that progress has been hindered by one Government. I hope that once that Government take over full responsibilities we shall be able to take up the negotiations again in a way that is satisfactory to the United Kingdom fishing industry.
I assure the House, as I have done on previous occasions, that in future negotiations, as in the past, we shall continue to stand up for the interests of our industry. The Government certainly understand that, in the face of

this uncertainty and the trading difficulties with regard to prices and so on that our fishermen have faced, our industry has continued to go through a difficult and trying period.
I believe that the Government have shown proof that our concern is a matter not of words but of deeds. As the House knows, we have provided £25 million in aid to the industry this year, on top of the extra £17 milllion that we provided last year. That is proof not only of our concern for the industry during a period of uncertainty while negotiations take place, but of our appreciation of the difficulties that the industry has faced on the trading front. When negotiations on the common fisheries policy resume, we shall continue to stand up for the industry and for the United Kingdom—with the support, I hope, of all Members of the House.

Several Hon. Members: rose——

Mr. Speaker: I remind the House that the debate will finish at 11.30 and that a considerable number of hon. Members appear to have a great interest in this subject.

Mr. Roy Mason: The Minister of State was right to warn the House of his worries about the changes taking place in France. This debate takes place shortly after the election of a new French President. The House may have thought that President Giscard d'Estaing was tough on the British, but President Mitterand has already made it crystal clear on French national television that in his view his predecessor was too soft on British fishermen. We must heed that warning, as it may have serious implications in the furtherance of our form of a common fisheries policy. I am certain that it will threaten any early agreement that we may have had in mind.
First, as the Minister indicated, there is no planned series of Fisheries Council meetings. Secondly, when the meetings resume, there will be greater opposition to any restriction on French vessels within our 12-mile limit after 31 December 1982. The new French President has made that absolutely clear. The battle for historic rights and the battle of the beaches therefore have still to be fought in the Fisheries Council meetings. Thirdly, France is not prepared to accept access restrictions in our waters outside the 12 miles.
I believe that the new, tougher attitude will result in the rejection of our proposals for preference areas—the 12 to 50-mile dominant preference zone for United Kingdom fishermen, the Shetland box and restrictions on the size of vessels within the boxes—not to mention the 10-year review that the French seek. Would not it also be politic for the French to frustrate as well as to object to some of our main proposals so that no real progress could be made towards a common fisheries policy during Britain's chairmanship of the Council? All those things are now possible with the tougher words issued by the new French President on fishery matters.
If those tactics succeed, I believe that pressure will then be brought to bear to force the United Kingdom to agree to a piecemeal approach to a common fisheries policy instead of negotiating a package. No doubt other fishing nations, sickened by interminable arguments, may well press for that, leaving aside the question of French access to our beaches in the meantime. In the end, with no United Kingdom leverage left, we should have all the other


fishing nations against us on access, and in that event we should really be in the dock. It will be a difficult time once again for the United Kingdom fisheries Ministers, and the intransigence of the French will certainly play its part.
Ministerial resolve on the agreed package for our fishermen—agreed by the industry and this House—will therefore still be necessary. Above all, if delay still looks inevitable—the Minister has indicated that that is certainly possible—Her Majesty's Government must serve notice on the French and the rest of the Council that our industry and our marine resources will be protected, that we shall not see them raped, that conservation will be one of the paramount concerns, and that enforcement will be carried out.
Among the batch of Common Market fisheries documents before the House, I should like to refer first to the bilateral agreements. There is, as the Minister mentioned, the Faroese arrangement—a reciprocal agreement about quotas between the Common Market and the Faroese—which allows the Faroese quotas within Community waters and is supposed to grant similar rights for Common Market vessels in Faroese waters.
In practice, that is not so. The Faroese are able to make the maximum use of their quotas in Common Market waters, but they make it difficult for Common Market vessels—and in particular those of the United Kingdom, the nearest country—to catch the quotas allocated to them. This is because of Faroese conservation policy. That policy is sometimes for quite respectable and understandable reasons, but in practice the Faroese fish their quota and we cannot fish ours. Therefore, I agree with the Government that there should be no deal until a better balance has been struck.
There is also some concern about salmon. Until about 10 years ago, the Faroese had a very small salmon-netting industry which had only a very insignificant effect on the United Kingdom industry, even though it is clearly established that the fish caught in Faroese waters are heading for United Kingdom waters to spawn. There has in recent years been a sudden and very big increase in the quantities netted, and the Faroese have apparently announced their intentions to catch as much as 1,000 tonnes next year.
That is a great quantity of salmon, and there is clear evidence that catches on that scale will have a damaging effect on the amount of salmon reaching United Kingdom waters to spawn. An unprecedented increase on that scale is contrary to the provisions of the United Nations Conference on the Law of the Sea, and some attempt is being made in that quarter to get controls on the Faroese salmon catch. Particularly when the salmon question is taken into account, there can be no question but that the whole deal is balanced too much in favour of the Faroese.
Another concern is that of threats to the herring stock, especially in relation to the North Sea. There is pressure on the Government from the United Kingdom fishing industry to open that area. That pressure has increased since it became known that the Dutch have apparently told the commission that from 1 June they intend to catch 7,500 tonnes of herring from the North Sea in an area immediately off the Dutch coast.
The proposal for a bilateral deal with Sweden, as suggested in these Common Market documents, will therefore cause further concern, because it can only increase pressure on that stock. If it is in the mind of the

Minister that reopening should take place, it must be closely controlled and on a basis that satisfies us that this vulnerable herring stock has a chance to survive.
Bilateral deals—with Canada on cod, Sweden on herring, and the quota deals with the Faroese—invariably favour the third countries rather than the United Kingdom. This is an area of EEC fisheries negotiation in which we have to be constantly vigilant. Time and again we have warned the Government about the unfavourable balance that we get in these bilateral agreements.

Mr. Buchanan-Smith: I am sure that the right hon. Gentleman would equally fairly say that the completed bilateral agreement with Norway has been welcomed by our industry.

Mr. Mason: Yes. That is one in a batch. The hon. Gentleman will recall that I warned him about Guinea-Bissau and some of the bilateral agreements that we made about a year ago which were most favourable to Third world countries, but not to the United Kingdom.
Another concern relates to the contents of the paper dealing with the regulations of fishing activities in a coastal zone, especially the United Kingdom's proposal of a Shetland box with a view to giving Orkney and Shetland a preferential fishing zone. We have some local differences to sort out on the sizes of vessels in this proposed zone, but, that apart, we must defend our coastal belt and preferential zone proposals. Therefore, it is right that the Government should be critical of the Commission's proposals on the interests of coastal fishermen. The Commission's ideas are not in line with ours.
The Minister spent some time on the major paper before the House on the social aspects in the Community's sea fishing sector. This is a major paper for reform and harmonisation covering all social aspects of the sea fishing industry. It is a typical Common Market effort to harmonise all fishing fleets and their industries on forms of vocational training, employment, safety and health at work, and working conditions. It is laudable, but it will obviously be a long haul. There are many differences among the member States, some so great and the industry as a whole so backward that we might encourage the Commission in this general endeavour.
I agree with the Minister that in training we are abreast of most countries and, with the increasing involvement of the Sea Fisheries Training Council, we have the necessary machinery and industrial and employee involvement to develop our training requirements and to share with other Common Market fishing nations the knowledge and skills of our industry. At this stage, as the Minister suggested, the industry is conservative in its outlook and sees no need to do so. However, if progress on this score is made by the Commission, although it may take time, bearing in mind the anger with and the frustrations of the Common Market's fisheries policy as a whole, there will be benefits for all Common Market fishermen in co-operation on education and vocational training for sea fishermen.
One fault is that the resolution covers such a wide area. With 11 separate areas of training requirements, it tends to overwhelm national Governments and their fishing industries. But the general thrust of the social aspects of the paper is right, covering employment, safety and health at work and working conditions, although in the United Kingdom many Departments other than the Ministry of


Agriculture, Fisheries and Food are involved—for example, the Departments of Trade and Employment and the Treasury. When one considers that under "working conditions", holidays, pay, pensions, various benefits, bonuses and hours of work are involved, the unions and employers and the Government and the docks boards would not be ready for what they would term Common Market interference on such a scale.
The Government must face the fact that in our own fishing industry the demand by crews for a better deal is growing. The Transport and General Workers Union's booklet "Fishing, A Way Forward" spells out many of those demands. We dealt at length with those demands on Second Reading of the Fisheries Bill.
At present, the system of payment of skippers and crews works in such a way that part of the payment goes to the boat and part to the skipper and crew. With the depression in the industry and that system, the crews now feel that they are doing badly and getting a relatively small share of the limited total share-out. Therefore, they are getting restive. The result is a greater movement towards unionisation and a feeling that if they become more unionised they will get formal rules about their share of the value of the catch—their entitlement—and improve their position in relation to that of the skippers.
The recent payment of Government subsidies is likely to boost that trend. Payment to vessels, which in turn means the skippers, will cause frustration and anger. It has done so in the past and will do so on this occasion, when companies and skippers have not been wholly fair and when the crews have been denied their compensation. In Scotland, there are already rumbles from men with small boats because they fear that they will get a raw deal.
Therefore, the Government and the new fish industry authority have a major job to do in order to bring about the aims of some of the requirements laid down in the paper on social aspects. It is a matter of immediate urgency to save what remains of our fishing fleets. Never before has the industry been in such a parlous state. It is in a deplorable economic condition. The deep sea fleet is being crippled beyond repair, and the inshore fleets were allowed to flounder without any Government protection against the flood of cheap fish imports which, in effect, laid up their vessels. Indeed, those fishermen were better off on the dole.
In the wake of this temporary stop-gap aid the Minister addressed fishermen in Lowestoft on 9 May and said:
At a time when every penny of public expenditure has to be scrutinised and justified the very fact that this year and last this Government has provided more money than the previous Administration provided during its entire five-year span speaks for itself.
But why is money needed to prop up the fishing industry? The Government's policies have persistently driven it to the wall. Some companies have even been driven to bankruptcy. One need only consider the strength of sterling, high interest charges, cheap imports, high fuel costs and the fact that there are no positive monetary compensatory amounts for fishing as there are for agriculture.
Indeed, the Government's monetarist policies are directly responsible for strangling the British fishing industry. There is nothing to boast about in giving such piecemeal aid. It is appalling to see the deep-sea fleets rusting at the quaysides. Time after time our inshore fishermen, particularly in Scotland, have gone on strike, blocking the ports and trying to stop blacked fish imports. Sometimes crews prefer the dole. Representations have been made to No. 10. In the wake of that almost constant uproar, the Government are forced to offer a subsidy—a short-term alleviation—time and again.
How long will it be before the same cycle is gone through again if progress towards a common fisheries policy is delayed yet again? To save the industry, something more positive and immediate is needed. The Minister and the Government must go for higher official withdrawal prices and must help to curb the tide of cheap fish imports. There is a need for sensible minimum entry price. Why cannot the Government think of the possibility of export rebates to take care of seasonal surpluses, diverting the surplus from fishmeal production to human consumption in the less-developed countries? Why cannot the MCAs—the positive monetary compensatory amounts—be extended to fisheries, just as they are extended to agriculture? Under the Treaty of Rome, fisheries are covered by the umbrella of agriculture. Why not try to match the fuel subsidies of our main competitors? That would also help. As most of our competitors are doing, we should consider a restructuring scheme for the British fishing fleets.
The industry must be given hope. A restructuring scheme involving payment or compensation would help. Some redundant catching capacity could be retired, laying-up premiums could be paid and investment could be made in new vessels in accordance with the types of fleet best suited to the changed circumstances. Surely, such action would be better than periodically offering a crutch for this crippled industry to hobble on, as it does now.
In the next round of talks we do not want any back-door dealing or the bypassing of Parliament. We all fear that the Minister is weakening. The Clayton interview in The Times and articles in Fishing News in which the Minister says "We must give way" give us fear. The Minister knows the resolution of the House. We are keen to establish conservation measures and enforcement of conservation areas. We still press for our exclusive coastal belt of 12 miles, our 12 to 50-mile preferential fishing area for United Kingdom fishermen, and a total allowable catch of 45 per cent.
Suspicion is rife in the House that the Minister is beginning to weaken, especially on the 12-mile belt and the preferential zone. We warn him that he will not be let off lightly if the unanimous desire of the House is ignored. If he stands by our agreed package, he will continue to have our support. He has a unanimously agreed mandate. If he stands by it, he will have our support. We hope that he will. We now have to wait for the next round of talks. The Minister will be on test further.

Orders of the Day — Common Fisheries Policy

Mr. A. J. Beith: The right hon. Member for Barnsley has outlined a series of propositions which have been repeated often in the House. We all seek to achieve the aims that he describes, but the outlook is looking more dismal than ever. The Government should now be preparing contingency plans in case the negotiations break down.
I wonder whether Ministers appreciate the deep cynicism, anger and despair that exist in many fishing communities. There is deep cynicism about the direction of fishing policy in Europe and at home. There is growing conviction that not much fishing industry will be left now that the deep sea industry has gone and the middle water and inshore sections are severely threatened.
That cynicism is inflamed by the feeling that all the conservation measures which British fishermen have had forced upon them are flouted with impunity throughout the Community. Recent news that there is to be no prosecution or effective enforcement in respect of the Boulogne landings, which were televised, has been received with understandable anger by British fishermen.
It would be difficult for British fishermen to convince the rest of the world that they alone observe all conservation rules. However, they can point to the fact that British enforcement of conservation rules is rigorous and determined and that enforcement by a number of other EEC States is non-existent and the subject of derision even to fishermen who openly flout the rules.
In the fishing communities in my area, the cynicism is worsened by the fear that yet further concessions will be made by the British Government in the same area where so many concessions were made at the time of accession in 1972. I refer to the water between six miles and 12 miles off the North Northumberland coast. I tabled a number of questions which the Minister of State answered about what is being considered now for that area. The spectre of historic rights was raised yet again. A number of references were made to supposed historic rights in the herring fisheries in that area and to rights which go back to the 1964 London convention and the period between 1953 and 1962.
The Minister has said that since 1 January 1973 all member States have had the right to fish for herring in the six-mile to 12-mile zone from Coquet Island to Berwick, except in the periods when herring fishing was banned. He said that his Department was not aware of the extent to which any of the rights had been exercised. If other countries are claiming historic rights in the present negotiations, the onus is upon them to prove those rights.
The onus is upon the British Government to be prepared in such negotiations. Fisheries officers surely have evidence about whether those rights have been exercised. Fisheries officers and the inspectorate of the Department must have the knowledge at their disposal. They are experienced men who spend a great deal of time studying what is happening on the fishing grounds. I am amazed that the Department can suggest that the evidence does not exist to test the claims being made. I want to see the Government armed with the evidence to challenge what are, in some cases, ill-founded claims.
Fishermen in my area are asking what we will receive if we yield on herring and allow the right which was created in 1972 to be carried over into any new agreement. Will we get a reclaiming of the area from six to 12 miles for demersal species, or will that also be lost? I hope that the Minister does not regard the six to 12-mile concession made in 1972 as given away for good. That was not the policy when the hon. Gentleman took up his present post. The previous Government had made clear that it was part of our negotiating position to seek to reclaim the lost territory. It should be part of our position now.
Fishermen are asking whether there will be any fishing industry left when the negotiations are completed. The question arises in whatever kind of fishery one examines. There is talk, for instance, of the possibility of reopening some herring fishing in the North Sea, perhaps off Scotland or some parts of England. I hope the Minister realises how inflammatory would be the opening of a herring fishery that did not extend to the Northumberland area and which did not extend to the Longstone fishery and to the Farne Deeps, especially as Danish fishermen will be allowed to continue fishing immature herring in the Skagerrak. If anything has contributed to the decline of the North Sea herring fishery, it is that fishing of immature herring. When a relatively well-conserved area of British responsibility, the Longstone fishery and the Farne Deeps, has remained closed for a period, it would be putting a nail in the coffin of fishing in Northumberland if a reopening of herring fishing excluded that area.
British fishermen also ask what is the future for the whiting fishery. The fishermen are threatened with an increase to 90mm in the mesh size for whiting. That increase comes in the face of a reduction in the size of the Norway pout box. All the evidence produced by the Government suggests that these two matters are closely interrelated. It is no good the Government trying to defend the Council decision on the basis of the interlinking between the mesh size and the pout box when it is known that the pout box size has been reduced. British fishermen are being asked to make up the shortfall by accepting the 90mm limit. The Government have said on a number of occasions that they are studying the matter and that there will be further discussion well in advance of any possible implementation of the decision. I hope that the Government realise how strongly fishermen feel and how damaging will be the increase to 90mm in the part of the industry that fishes for whiting. It is no good telling such fishermen that there may be long-term gains if they will not be here to benefit.
One sees the same thing happening in yet another sector. An increase in mesh sizes has recently taken place in prawn and shrimp nets. This meant substantial expenditure for many fishermen. The sum of £2,000 is nothing to spend on equipping a small boat with a single net. Fishermen who have recently invested in new nets find themselves confronted with yet another bill to meet another increase in mesh sizes.
In many cases, the same fishermen who are faced with the burden of buying additional nets to meet the increase in mesh size for prawns and shrimps also have to cope with new limits on the lobster fishery. There is already a severe reaction among fishermen in the North-East of England to the 83mm mesh size limit for lobsters, and they are anxious about the possibility of an 85mm limit. The


Minister knows that fishermen's organisations in the North-East have protested vigorously about that possibility, as has the Northumberland sea fisheries committee.
What angers fishermen most about the lobster mesh size decision is not merely that they now have to put back the majority of the lobsters they find in their pots but that their own recommendations for conservation measures, some of which they have fought for over many years, are studiously ignored by the Department. Northumberland fishermen have pleaded for years for a return to the system under which egg-bearing female lobsters—berried hens—cannot be landed. The Minister cannot take a high-minded attitude about conservation with a group who have persistently argued for what could be an effective conservation measure.
The lobster fishermen of the North-East have also pleaded for licensing or control of lobster fishing. There is no restriction on the size of lobster that can be taken by skin divers, some of whom take many lobsters and dispose of them through their own contacts, and there is no limit on the number of part-time and occasional fishermen who take lobsters.
The continued absence of licensing and control in that sector means that an opportunity for conservation is missed. It is virtually the only sector of the industry over which there is no licensing or control. The Minister has said on a number of occasions that he would consider a licensing scheme only if it were argued for on a national basis, but the fact that there are some areas where it is mainly part-timers who are involved in lobster fishing is no excuse for not looking at the situation in the North-East, where there is a crying need for licensing or control. We already have experience in salmon fishing of a specifically regional licensing system and there is no reason why it should not be considered for lobster fishermen.
It inflames the cynicism that I have described when fishermen who have argued for much-needed conservation and control by the restriction on egg-bearing females and by a licensing system are told that they have to accept restrictions that already make it almost impossible to land lobsters and will certainly do so if there is an increase to 85mm. I plead with the Minister to monitor carefully what is already happening before moving on to the 85mm limit, and I hope that he will take careful note of what his local fisheries officers know from their observations.
We cannot afford to destroy an industry which depends so much on the hard work of people such as share fishermen, whom the Minister mentioned, and on which local communities are so dependent. At one time it was possible to argue that if only the British Government had total control over conservation and the EEC were not involved in the process a satisfactory conservation regime could be devised. It is no longer easy to sustain that argument, because British fishermen are losing confidence in their own Government's ability to apply sensible and sensitive conservation measures that recognise their problems and needs.
I ask the Minister to look carefully at the cynicisms and anxieties that are developing, because they are shared by fishermen who are not normally vocal and do not normally express themselves strongly, write letters or make detailed representations. They find that their livelihood is threatened, and whereas they once feared that a time

would come when the failure of a common fisheries policy agreement would destroy their livelihood they now worry that they will not even be here to see that day.

Sir Walter Clegg: These debates on EEC documents seem to take place in a void. It is like Hamlet without the Prince of Denmark, because everything that has been said depends on having a common fisheries policy. There are lots of goodies in these documents that I should like—preference for deprived coastal areas, training and safety measures. Those are matters that we should all like, but without a common fisheries policy we are debating in the dark. That fact has haunted all the speeches that have been made so far.
It would appear from the speech of the right hon. Member for Barnsley (Mr. Mason), that his party never had responsibility for fisheries over the past few years. My port is suffering at the moment from a hangover from the Labour Government's decision to allow a loan from NAPE to enable our landing company to land fish. That haunts the company because it now has to pay enormous interest although it never employed the people to whom it paid compensation.
On the subject of cheaper Canadian imports, my right hon. Friend the Prime Minister got into considerable trouble at the last meeting for standing up for British interests and denying the Germans the agreement that they wanted whereby cheap Canadian fish could come into this country. The right hon. Gentleman poured scorn on the £25 million that had been given by the Government, but the bulk of the Fleetwood middle water fleet is now at sea, thanks to that help. The same is true of the inshore fleet, too. I accept that there is concern about how the money has been distributed, but the bulk of opinion in the industry agreed that that was the best way. If the fleet is at sea catching fish that sells for a reasonable price, all the people on shore benefit from it.
I want to raise one or two matters that affect Fleetwood. One is the measure that makes no provision for fishing in the Irish Sea. I understand from the explanatory note that the Government do not think that this is the right policy. I hope that some regime will be agreed for the Irish Sea.
In Fleetwood we are worried about keeping our medium trawlers at sea. It is essential to have access to the waters off the North of Scotland. Considerable fishing is taking place there at present. My fishermen tell me that in the bad weather in winter the supply of fish for the Fleetwood market depends upon the bigger trawlers being able to fish when there are gales, thus being able to provide the market with a steady supply of fish. That is essential for them to keep up their business throughout the country.
Clearly, there is concern about the result of the French election, which appears to have postponed the achievement of a common fisheries policy. That is bad news. However, the Government have to soldier on and take note of what the industry and the House tell them. The Ministers in the Department have always taken notice of what they are told by the industry in their negotiations at Brussels, and they take representatives of the industry there with them.
If we are a long way from a common fisheries policy, as I think is the case, the Government will have to keep a close eye on the industry's reactions to the measures that they have already taken. I beg my hon. Friend the Minister not to rule out the necessity for further help before the end


of the year unless we have a common fisheries policy. Fleetwood would like help for exploratory voyages to the grounds off Scotland, where we have lost the technique that we formerly had but which we could recover. I ask my hon. Friend to consider the matter again because, as he knows, there have been talks on the matter between the industry, Fleetwood and his Department. The industry is still in great trouble and in need of the care of the House. In any tough stance that my hon. Friend may wish to take in Europe on behalf of this country, he will have the full support of both sides of the House.

Mr. Robert Hughes: In opening the debate, the Minister made it clear that we were no further forward in negotiations on a common fisheries policy, nor shall we be until the results of the French Assembly elections are known. We told the hon. Gentleman time after time that with the presidential election looming there would be no agreement, and that forecast has been borne out. However, we still have to soldier on and be firm about what we want out of the common fisheries policy. As many hon. Members have said, as long as the hon. Gentleman remains firm and does not weaken he will have our support.
I hope that the Minister will tell us a little more about what will happen in the Faroes. He says that the document about the Faroes is unacceptable to the Government. We need something more positive than that, because fishermen who go there to fish have been put out of court by the restrictive rules that the Faroese have adopted over the years.
In this short debate I want to concentrate on the document that deals with social conditions. I found the Minister's response disappointing in the extreme. He virtually said that all the suggestions in it were not worth pursuing. For example, he said that as regards training we were well up with the practices of other nations, that we had nothing to learn from the Commission and that, therefore, we could let things stay as they were. I hope that that will not be his position. I hope he will say that where the document lays down training conditions that can be of benefit not only to our fishermen but to fishermen elsewhere they will be supported. We should be putting a positive input into training.
It is regrettable that the section dealing with working conditions at sea is not considered appropriate. It is the age-old story that the employers are ruling the day. The fact that we have had share fishing for so long and that the employers are happy with it means that in the Minister's view the very principle of share fishing should not be challenged. Apparently he has told the Commission that any alteration to share fishing methods of payment must not be considered.
In paragraph 5.2 the document suggests that it should be possible to reach a point at which the two sides of the industry can co-operate to reach agreement on giving fishermen a fixed wage, which would gradually increase in proportion to their total earnings. What is wrong with that? I dare say that it is what happens in many areas. What is wrong with a positive approach towards that and towards hours of work? The document tells us in paragraph 5·3:
Quite apart from social considerations, the need for safety at work and navigational safety will involve some effort in the Member States concerned to reduce hours of work on fishing vessels on account of the frequency of accidents.

Apparently, that sort of item also is not appropriate to deal with.
The document suggests that member States should introduce hours of rest during voyages of any significant duration. It says:
A minimum of eight hours' rest per day"—
that is, over 24 hours—
of which six should be consecutive, would seem to be appropriate for vessels that spent more than 48 hours at sea.
That may be regarded as interference with the industry, but if the Commission suggests that it should be brought about it is wrong that we should say that it is not appropriate.
There are a number of other issues, including holiday entitlement and particularly job security. Job security has bedevilled the industry for a long time. Representations have been made to the Minister about decasualisation. Perhaps the trawling fleets are a much smaller part of the industry than they used to be. But share fishermen suffer if they lose their jobs. Article 5 suggests that there are many ways of dealing with that. Nevertheless, it should be possible to guarantee employment for fishermen, even in the small-scale fishing sector. However, that was written off by the Minister as not appropriate to deal with through the Commission.
It is regrettable that the needs of working fishermen, as opposed to skippers and owners, are pushed aside. I object to the fact that the aid that has gone to the industry—a considerable sum has gone to the fishing industry—has gone either to the owners or to the skippers and not one halfpenny has gone to the fishermen who have been displaced because of changing conditions. Representations were made to the Minister about that before the last package of aid was finalised, but nothing came of it.
I do not go as far as my right hon. Friend the Member for Barnsley (Mr. Mason), who said that there was a great feeling of unrest among share fishermen. There is a great feeling of unrest, but I am not sure that it has yet channelled itself properly towards being prepared to take part in unions and in more regulation of the industry. That is bound to come, because that is the only way that fishermen will achieve proper protection.
There is much to do in the fishing industry. We speak about it mainly in terms of striking a balance between availability of employment and people for employment as though that were the real thing. The real thing is to ensure that the industry survives, but, even more so, it is important to ensure that the needs of ordinary fishermen are taken into account. I hope that when we are finally given the next aid package—which will not be long away—it will give serious consideration to those who are losing their jobs because of the contraction of the industry. If we regard it as an industry of skippers and 'vessel owners, we shall let down the people who are the mainstay of the fishing fleet.

Mr. Albert McQuarrie: It is unfortunate that on every occasion on which we discuss fishing we appear to discuss it at the latter end of the evening. We have a wide range of documents carrying important information for the future of the fishing industry, and yet we are restricted to a short time to get the message across to the Minister and to allay the fears of the fishing industry that the House is likely to let it down in any shape or form on the common fisheries policy.
Since I became a Member of the House, I have been closely aligned with Opposition Members with fishing interests. It has impressed me deeply that this is the one industry on which there is common agreement between us that something must be done for the industry as a whole. I hope that that agreement will continue until we achieve agreement on the common fisheries policy.
Because we are short of time I shall comment only briefly on some of the draft instruments. The proposals in draft instrument 5362/81 are totally unacceptable to the British fishing industry. I welcome the Government's rejection of it. There are no protection measures outside the 12-mile zone to provide the preference for the local communities which are entirely dependent on fishing. There are no provisions for restricting the number of licences nor are there adequate proposals for fishery management.
The Fisheries Bill, which is completing its passage in another place, has made wide provisions for those measures and the Community will require to take note of them before proposals will be acceptable to the Government and the fishing industry.
Document No. 6021/81 is welcome in some respects. It takes account of fact that the total allowable catches for last year were set too low. What concerns the fishing industry is the proposed increase in the TAC for North Sea and English Channel herring to take account of the 1,000 tonnes of herring allocated to Sweden. The new TACs for 1980–81 will be of considerable help to what might have been a very sharp reduction in the fishing effort this year, which the fishermen certainly could not accept after such a long period of uncertainly and desperation within the industry as to its income.
Document No. 5361/81 contains an important set of proposals as it sets out, from a Community point of view, the basic principles on the main issues of access arrangements, quotas, conservation and management. Neither the proposals for the 12-mile belt nor the proposals for preference beyond the 12-mile belt are acceptable to the fishing industry. I am glad that once again my hon. Friend the Minister has rejected this part of the proposed instrument.
It is a matter of great concern that the Community has seen fit to suggest a 10-year review of the common fisheries policy. That would set back the present negotiations even further. The Government must impress upon the Community that we are not prepared to tolerate these endless delays. The fishermen's patience is exhausted. While they have been willing to work closely with Ministers, as the right hon. Member for Barnsley (Mr. Mason) said, at meetings in Brussels and in the United Kingdom, the failure to secure a CFP cannot go on for much longer.
Document No. 4884/81 provides for the allocation of herring from the North Sea and the English Channel. It will be of considerable importance to the British fishing industry. The proposals set out the quotas for 1980/81—which, because of the time, I do not propose to read—of the various species. But the Government must stick by their determination that there will be no fishing for herring in the North Sea until proper TACs are agreed after the scientific research has been firmly established.
It is also right that the Government should not accept the draft instrument if its measures are not to be taken as part of the basis for the settlement of the CFP.
On document No. 5360/81 the Minister is to be congratulated on having these proposals incorporated by the Community. The amended provisions for herring by-catches are of considerable importance to the fishing industry. There has been wide concern about the effect that this has been having on the sprat fishery off the north-east coast of Britain and the severe loss that was taking place in juvenile herring, which will now be protected. I hope that the hon. Member for Berwick-upon-Tweed (Mr. Beith) will appreciate that there is to be protection for juvenile herring.
I am concerned, however, that there are no draft regulations setting out proposals for restructuring the fleet. Certain recommendations were made in earlier draft instruments, but these were not of a positive nature. The absence of a CFP and the urgent need for the fishing industry to know what the future holds are bound up in the nature of any restructuring which will be suggested. I am still of the opinion that the Government should be looking at some form of restructuring on a United Kingdom basis, as the lack of a CFP could well mean that at some time in the not-too-distant future the British Government will require seriously to consider the whole future of the British fishing industry with or without a CFP.

Mr. Donald Stewart: I acknowledge that the hon. Gentleman deals with the industry in a bipartisan way. Does he agree that the time is coming when we might be obliged to return to having a 200-mile limit and to negotiate from there?

Mr. McQuarrie: I am grateful for that intervention. I accept wholly what the right hon. Gentleman says. In the latter part of my remarks I may be referring to just that point, because I feel very strongly that we must get a CFP agreed. It has not been failure on the part of right hon. or hon. Members which has caused the lack of agreement. It has been the fault of the other Governments of the Community.

Mr. David Penhaligon: Enormous exclusive regimes may help in some areas, but the damage done to mackerel off Cornwall has not been done by the French, the Germans, the Italians or any other nation in Europe. It has been done by people from Scotland, our fellow countrymen. It is they who have wrecked mackerel stocks off Cornwall. It is no good the hon. Gentleman laughing.

Mr. McQuarrie: I am not laughing at the hon. Gentleman's comments. I am laughing because whenever a fishing debate takes place in the House the hon. Gentleman always refers to the Scots scooping up the mackerel from his patch. Does he remember the days when his vessels scooped up the fish from Scottish areas?
Another problem that is worrying the fishing industry is the proposed establishment of marine nature reserves. The industry is totally opposed to these proposals because they will lead to the loss of rights where fishermen now operate. Any such suggestions can be regarded only as a further erosion of the fisherman's already limited opportunities to carry out his calling and can seriously affect the interests of lobster and shellfish fishermen who might be denied access to their traditional grounds.
The fishing industry has accepted the need for conservation and it agrees that there may be a case for


some form of marine environment. However, the present depressed state of the fishing industry is such that it is essential that no further erosion takes place of the fisherman's rights by the creation of marine nature reserves in any of the traditional fishing areas.
Where do we stand on the completion of the common fisheries policy? For two years Ministers have fought hard to see the end of the talks. Their efforts have been to no avail. When the last abortive meeting took place in March we were told that there was no hope of a settlement until after the French Presidential election. France now has a new President who will take office on Thursday and will immediately call a general election. That means that there is no hope of any meeting of fishery Ministers until after the general election.
The Government have poured massive aid into the industry over the past year in the hope that the common fisheries policy would be settled. We are now in for a further long delay. I hope that my hon. Friend will tell us how we are to proceed. As my hon. Friend the Member for North Fylde (Sir W. Clegg) said, there may be a request for aid later in the year. The fishermen do not want handouts. They want a CFP agreed so that they may be able to fish for the fish that they know are available in numbers sufficient to give them a satisfactory living without coming with the begging bowl every three months to this or any other Government.
There is no point in the Community issuing masses of draft instruments if none of them can be implemented until we secure a common fisheries policy. There must be a more aggressive approach by the Government and an ultimatum put to the Council of Ministers that unless a CFP can be agreed by a definite date the British Government will require to consider taking unilateral action on all matters affecting the fishing around our shores until a CFP is agreed. We should ban all Community vessels from our shores. We should license strictly Third world States. We must assume total control of the seas and let the Community understand that we have waited long enough. Force is required. We hold the master card because 68 per cent. of the fish caught in the Community waters are caught around the shores of Britain.
Let us show the Community that the welfare of our fishermen and our people comes first and foremost. If the Community cannot agree on a policy, we should operate our own as we have the resources both offshore and onshore. I do not blame our Ministers, but they must now come out fighting or we shall never have a common fisheries policy and the fishing industry will be doomed for ever.

Mr. James Johnson: I heard the hon. Member for Berwick-upon-Tweed (Mr. Beith) use the word "cynicism" when talking about debates on the common fisheries policy. I do not know whether I would use the word. Sometimes there is a charade. That has been my impression after Ministers have made their monthly or fortnightly statements at the Dispatch Box. My mind goes back to an old colleague, a former hon. Member for Stoke-on-Trent, South, Ellis Smith, who once burst out "Mr. Speaker, Mr. Speaker, it is only a facade. It is only a facade." I hope that it is not a facade tonight. The documents before us are full of laudable sentiments, but to me the whole matter is almost

an academic exercise. I am not exactly saying that it is a farrago of sentiments and pious aspirations, but much of it looks to me like pie in a future sky.
As a Hull Member, I hope that the Minister will manage to fit into his common fisheries policy some place for the Hull distant water fleet. Is there any hope for us in the future? Is there any chance of a share of third-patty agreements? Shall we be able to keep even 10 or 15 vessels going, compared with the 137 that we had when I first came to Hull some 20 years ago?
If all the proposals in the documents were carried out, an enormous bureaucracy would be needed to operate all the schemes, with consequent delay and expenditure. The question is therefore whether the political will exists to carry out the proposals, desirable as they may seem.
We have battled for years in the House for decent conditions for our men on the decks and for a common fisheries policy that is fair and honest for our fishermen. I was, therefore, delighted to hear the Minister turn down document No. 5362/81 because the proposals were totally inadequate and no protection for local communities, whether in Scotland, the South-West or, indeed, Yorkshire. He was also doubtful about document No. 6021/81.
The Commission's findings with regard to social aspects of the sea, in document No. 11626/80, contain some worthy comments about working conditions. No one can fault them. Nevertheless, I regard those statements as a bag of flatulent platitudes. For example, the document states on page 20:
Any measures proposed should … be subject to meticulous examination
and, of course, "good judgment".
After much talk about all the wonderful changes that ought to take place, however, the document states on page 21:
Bearing all this in mind, it does not seem appropriate at present to take uniform action at Community level to amend labour law affecting sea fishermen. Such action might be futile as it is virtually impossible in practice to take account of, all the constraints existing at local level, of varying circumstances or of changes taking place in certain kinds of fishing.
That is an example of what Oliver Lyttelton once referred to in the Chamber as glimpses of the blindingly obvious. The authors of the document seem to end up by damning their own efforts.
Who wanted Community laws of this kind anyway? Following the Holland-Martin inquiry in our own fishing industry, our own Government in Whitehall have been getting on with the job of improving working conditions and safety. I believe that they can more adequately cope with the task than certain bureaucrats a few hundred miles away.
With regard to document 5361/81, dealing with conservation and management of stocks, I am again delighted with the Minister when he states that it will not be tabled in this form at the Fisheries Council on 6 April.
My verdict is the same concerning the hon. Gentleman's comments on document 5362/81, where there seems to be inadequate protection for fishermen outside the 12-mile zone. I wish to talk about the 12-mile zone and to finish on this aspect in the context of the common fisheries policy—indeed, in the context of the Minister's own behaviour in the last few days.
What will be the exact size and shape of the 12mile zone if and when a common fisheries policy is settled? Can the Minister please shed some light here? I should like to


know what he meant at Lowestoft on 9 May, speaking to the National Federation of Fishermen's Organisations, when he said:
We may have to pay a certain amount of attention to those countries that can show that they have an historic record of fishing and are dependent on it in certain areas within our waters".
I gather that he later added something about the United Kingdom not being prepared to negotiate and said that if that were to happen the talks would come "bang to a stop".
Fishing News has some hard things to say about the Minister. Week after week we look at Fishing News and regard it as a dependable journal. It talked of "political chicanery". I have sat on the Opposition Benches and watched the Minister, and I think that he is an honourable man. I should like to know whether he honestly believes that we shall get a good deal out of the common fisheries policy in the light of what he was telling the NFFO at Lowestoft a few days ago. Surely, he cannot accept that a bad deal is better than no deal at all.

Mr. John MacKay: I do not want to follow too closely the argument of the hon. Member for Kingston upon Hull, West (Mr. Johnson), apart from perhaps taking the very beginning of his speech, in which he mentioned the distant water fishermen who, in his port and some others on the East Coast, such as Aberdeen, has suffered grievously over the last 10 years. But not all the problems—indeed, very few of the problems—that have in the past affected the fishing industry are directly attributable to the Common Market; they are part and parcel of a very much bigger problem in fishery conservation and in methods of fishing.
Of the two documents that I wish to mention, one can be resolved only inside a common fisheries policy, and the other would be a problem whether we were inside or outside the Common Market.
I want first to talk about the document relating to the Faroe Islands. The policy implications appear on the reverse side of the Government's document:
The Government considers, however, that the reciprocal fishery arrangements negotiated for 1981 with the Faroe Islands do not represent a reasonable balance of interest of the two parties".
I want in particular to take one balance of interest which may not be the one that directly springs to mind. That is as it affects the Atlantic salmon, which swims through the Faroe Islands on its way to and from Greenland from the rivers of the United Kingdom, of Ireland and, to some extent, of France. At least the Fench and ourselves have a common interest in protecting the Atlantic salmon.
These are our salmon—Scottish salmon. About 30 per cent. of the 700 tonnes caught in the Faroes last year was reckoned to come from Scottish rivers. It is Scottish, English, Welsh, Republic of Ireland and, to a small extent, French salmon. It is not salmon of the Faroe Islands. So far as I know, the Faroes have no salmon rivers.

Mr. J. Enoch Powell: What about Northern Ireland salmon?

Mr. MacKay: I am interrupted to suggest that Northern Ireland should be included, and I happily include it.
The salmon is very important to rural areas of the United Kingdom and of the Republic of Ireland. The

salmon is important not only for net fishing but for angling. It is important for the pleasure and employment that it gives via the tourist industry. Many hotels in the Highlands of Scotland are a major attraction to tourists because of the salmon fishing. People go there for the fishing, and that provides employment in the tourist industry. [Interruption.] If the right hon. Member for Western Isles (Mr. Stewart) does not want the employment that salmon fishing gives to the tourist industry, my constituency will gladly take it.
The Faroese have increased their take of Atlantic salmon. Indeed, in an answer to me on 14 April my hon. Friend told me that from nil in 1978 Faroese imports of salmon into this country alone had risen in 1980 to 43–9 tonnes. Presumably imports into the Common Market are a great deal higher.
I understand that in Oslo tomorrow there is to be a meeting of representatives of Canada, the United States, the Common Market and Scandinavian countries and that one of the principal items on the agenda will be the problem of the interception of salmon at sea. I trust that my hon. Friend will tell me that the Government still support article 66 of the United Nations Conference on the Law of the Sea, which states that salmon are the responsibility of the country of origin and that the countries which breed salmon should control the fishing, even in host countries, such as the Faroes and Greenland. I hope that the Government accept that, as they have in the past, and will stick to it. I hope that they will not move to an EEC-type arrangement where, because the fish swim through the pond, they are the responsibility not of the country of origin but of the Common Market.
I hope that the Common Market will take acount of the peripheral areas of this country, which depend greatly on salmon, and realise that it has a responsibility to conserve the salmon stocks in the high seas and to prevent the Faroese and the Greenlanders from taking an increasing take.
If it comes to it, I think that we should refuse to take salmon from either the Faroes or from Greenland if they increase their take beyond the limits that the stock will tolerate. I think that all hon. Members accept that the Greenlanders can take some of the stock, but they must accept that if they do not allow enough to come back to allow us to have a reasonable industry and the salmon to spawn there will be no salmon left.
The other important point that I wish to make, which is related to peripheral areas, concerns local fishing plans. Article 4 of document 5361/81, which is very cheering, says:
The volume of the catches available to the Community referred to in Article 3 shall be distributed between the Member States taking account most particularly of:

—traditional fishing activities;
—the special needs of regions where the local populations are particularly dependent upon fishing and the industries allied thereto"—
and that includes
the northern parts of the United Kingdom".
The commentary on this document is even more encouraging, because it says:
In addition, it is necessary to complete this proposal by arrangements of fishing effort that ensure consideration for the problems of coastal fisheries, in particular of economically disadvantaged regions as well as the desirability of regulating fishing activity within a coastal belt … In the immediate term,


such arrangements should be made for a coastal band around the Shetland and Orkney Islands and in certain parts of the Irish Sea.
Document No. 5362/81 contains proposals for Orkney and Shetland. There is nothing for the Irish Sea. When does my hon. Friend expect to have a document—however unsatisfactory—for the Irish Sea? Does the Irish Sea encompass the Firth of Clyde? What about the west coast of Scotland, from the Mull of Kintyre to the North of Scotland, including the waters round the Western Isles? They are every bit as sensitive as Orkney, Shetland and the Irish Sea.
The paper accompanying document No. 5362/81 expresses, once again, splendid sentiments. It states:
The interests of coastal fishermen of economically disadvantaged areas is an important element among the objectives of the Common Fisheries Policy and the proposals of the Commission concerning access are aimed at providing concrete and realistic responses to this in conformity with the principles and fundamental objectives of the Treaties.
As I mentioned at the beginning of my speech, we should have to address ourselves to this problem, even if Britain were not a member of the Common Market. On the West Coast and in the Clyde the problem is one of marrying the interests of the local fishermen—of my constituents, those of my right hon. Friend the Secretary of State for Scotland and those of my Opposition colleagues who represent constituencies further north—with the interests of fishermen from the areas represented by my hon. Friends the Members for Banff (Mr. Myles) and for Aberdeenshire, East (Mr. McQuarrie).

Mr. Donald Stewart: Is not the hon. Gentleman ignoring the fact that if Britain were not a member of the Common Market we should be in control of a 200-mile limit?

Mr. MacKay: The right hon. Gentleman is ignoring the fact that if we were not in the Common Market we should not be able to cope with the salmon problem, because we should not sit round the same table. In addition, we should still have a fishing problem. The problem of the West Coast and of the Clyde is caused not by people from France, but by people from the rest of Britain who want to fish there. I am sure that the right hon. Gentleman knows that there are about 800 fishermen on the West Coast of Scotland—from the Mull of Kintyre to Cape Wrath. In the Clyde, there are about 560 fishermen.
During the year, up to 1,800 fishermen visit the area from elsewhere in Scotland. That is part of the problem. Whether we are inside or outside the Common Market, we must do something to conserve fishing for the local fishermen and, at the same time, to recognise—as I do—the undoubted historic rights that fishermen from North-East Scotland have to fish there. Therefore, it is important that my hon. Friend should persevere with the special arrangements for local fishing. However, if the proposals for Orkney and Shetland were translated to the Clyde and to the West Coast, as the commentary above the signature states, they are not wholly adequate within 12 miles and are totally inadequate outwith 12 miles. Although it mentions licensing, it does not make any attempt to set out how that might be done. In addition, no attempt is made to define a local fisherman. That is of increasing concern to fishermen in my part of the world.
Therefore, I hope that my hon. Friend will persevere. It is vitally important for the well-being of the fishing communities round the Clyde and up the West Coast that

local fishermen—who fish in adjacent waters and who have nowhere else to go, because they have never been nomadic—should have a preserved and conserved position within fishery management there. When they have taken their share, the rest must be divided among those who come from the East Coast of Scotland and whose livelihoods must also be conserved. Unless we conserve the stocks on the West Coast and on the Clyde, as in the Orkneys and Shetlands, there will be no fishing for the fishermen of the East Coast and no fishing for those who live in those areas. The fishing villages that depend on fishing will end up deserted.
If the Common Market is serious about its intentions towards those peripheral and fragile areas, it will consider the particular problems of local fishery plans in those areas.

Mr. Austin Mitchell: The documents are the debris, fall-out or dandruff of the protracted farce in which we have been involved for the last 18 months of negotiating against ourselves. The British Government have obtained more concessions from the British fishing industry than from the Common Market. The Government have rushed to make concessions to the Market. They have thrown away most of their negotiating cards because the Prime Minister promised a deal and compromise over fishing as part of the budget agreement last year.
We have no cards left. We are in the same position as Herbert Smith when he led the miners in 1926. He was asked what the miners had to give, and he said "Nowt". That is the position of the fishing industry. It has to give more away to reach a settlement which it thought it would achieve earlier. Ministers are negotiating for a burial ground for the British fishing industry. That seems to be the limit of their aspirations.
Let us consider what has been given away. A country which contributes more than two-thirds of the fish stocks and asks for 45 per cent. of the catch is given less than one-third, and by some estimates just over one-quarter of the total catch. A country which had the power to impose national conservation measures to protect its own stocks and fishing has thrown away the power to impose those measures, which the Conservative Party promised to introduce if negotiations were not successful. They have thrown them into the conservation machine because such measures need the Commission's approval and can be thrown out within a month. That gives us no power of delay.
The Government have also thrown away the aspiration for dominant preference. That has been whittled away to a box of islands round Scotland. That is divisive because it threatens the larger vessels from Humberside and Grimsby, from which the 12 British United Trawlers vessels still fish. A surveillance regime now operates. What are the chances of Grimsby vessels having access to that area?
We have thrown away our major demand. What have we gained in return? All that we have gained is the French rejection of our offers and concessions. Now, the Minister is preparing the industry for yet further concessions by speeches such as that which he made today and headlines such as "We must give way" in Fishing News. Sad as it is, under the agreement cobbled together just before Britain entered the Market, the French are rejecting exclusive waters and are legally in the right. After the long


delay involved in the formation of a new French Government, the French will stick to their original demand because legally it is tenable.
The new French Government will be harder than the old Government, if only because they represent the fishing ports and want to win more of them in the forthcoming elections. The Minister is softening up the industry for further concessions beyond the 12-mile limit which is supposed to be the sticking point. We have come down from a 200-mile, 100-mile, 50-mile, and 12-mile exclusive zone. The most that we are likely to achieve is six miles or a patched-up compromise between six and 12 miles. The industry must ask whether it is worth continuing the concessions or whether it is better to stick where it is, inadequate and unsatisfactory as that is. At least, the NFFO is for sticking where we are.
We are doing badly on quotas and conservation. We are being cheated. The proposed force of 40 inspectors is totally inadequate to enforce the quotas. We cannot trust the national enforcement machinery. We cannot even trust the Commission. After all the evidence of illegal fishing for herring, the Commission will not take action.
A question was put in a body that purports to call itself the European Parliament asking what action the Commission proposed to take on herring. The reply was that the Commisssion had no evidence that catches and landings had been made illegally. The Commission smells no herring, sees no herring and speaks no herring. Yet 40,000 tons of herring have been landed, most of it illegally, in France in full sight of television cameras, the British fishing press and any British tourist who happened to be passing. However, the Commission, whose good will has to be trusted in the settlement, has no evidence.
The question of larger vessels also has to be examined. French freezing vessels seem to be fishing off St. Pierre. The Germans are probably fishing at this moment and certainly, according to my information, were fishing recently off Greenland, and the Dutch off the United Kingdom, while the United Kingdom freezer fleet remains mostly tied up.
Conservation is treated as a political football. The TACs can be increased to compromise the different, conflicting demands put before the Commission. Instead of a regime of selective fishing under proper control, there exists an auction situation involving bid against bid. The proposals for marketing are pathetic and totally inadequate. They fail to solve the problem of official withdrawal prices on the Continent that are far too low and of a £ sterling that prices our industry out of the market.
Despite the evidence, we are asked still to persevere, to keep on trusting and waiting for a settlement and to make more concessions. It is disastrous that the Government should offer no alternative counsels. We should be asserting ourselves and saying "Enough is enough." The compromise agreement that was put forward to allow access to our stocks must be scrapped as a basis of the policy. We should be looking forward in 1982 to regulating the common fisheries policy, if there is to be one, under the law of the sea, giving us the power to control our own waters and our own stocks. No one else has the interests in conservation and the building up of those stocks. To offer further concessions against ourselves would be the prelude to disaster for the British

fishing industry. It would be a recognition that the British fishing industry has only a small part to play in the national economy and that Ministers have effectively given it up.

Mr. Gavin Strang: This has been a useful debate, in which hon. Members have rightly taken the opportunity to address themselves to the wider issues that concern the industry. A substantial part of the documents has been debated on at least two occasions last year. In the limited time available, I should like to deal with some matters on which we would like fuller, more forthright replies than the Government have given recently.
The Government's financial aid to the industry is appreciated, although the Opposition are concerned about the method of distribution. There has also been a small improvement, perhaps temporary, in the prices received by the industry. Nevertheless, the Opposition attach great importance to the report of the committee established by the Government to examine the whole question of cheap imports. I hope that the Minister of State will be able to give a clear indication of the timing of a Government statement on the report. I hope that he will also confirm that the report is to be published.
I make no apology for reiterating the importance that the Opposition attach to the major issues arising out of the common fisheries policy discussions. Conservation has to be effective. The Minister must address himself to the remarks of a number of my hon. Friends, including my hon. Friend the Member for Grimsby (Mr. Mitchell). What about the flouting of herring regulations by Continental fishermen? Are the Government prepared to acquiesce in the Commission's taking no action against those nations, particularly France, that have been flouting the restrictions
Will the Minister give us some idea of his attitude to restrictive licensing? Are we right in thinking that there has been some movement in the Government's position over the past few months? Will the hon. Gentleman also take the opportunity to reassure us that the Government intend to use the powers that they will soon obtain in the Fisheries Bill that is going through Parliament? It is important that the klondiking should be effectively curtailed.
Let us not forget that on quotas we are talking about a share of fish that reflects not only the amount caught in British waters but, above all, the losses in third country waters. That must be borne in mind when discussions take place on a herring quota for this country. It will be no good talking about what was caught in previous years. If compensation for losses in third country waters means anything, it must mean that our quotas enable more fish to be caught in our waters than was the case previously.
The Opposition are concerned about recent developments in the Government's position on the important question of access. My right hon. Friend the Member for Barnsley (Mr. Mason) and a number of other hon. Members referred to the Minister of State's speech that is quoted in this week's Fishing News. Will the hon. Gentleman make the Government's position clear? Has there been a movement? Are the Government no longer committed to securing an exclusive 12-mile limit, with the phasing out of historic rights? I hope that the Minister will give us a clear and unequivocal answer.
What about the 12 to 50-mile dominant preference—call it preferential access if you will? When my right hon. Friend the Member for Barnsley questioned the Minister of State on 30 March and when the right hon. Member for Down, South (Mr. Powell) questioned the Minister of Agriculture, Fisheries and Food, they received equivocation. Ministers have consistently failed in the past few weeks to reaffirm the Government's commitment to securing a dominant preference in the 12 to 50-mile band. I hope that the Minister of State will make clear that there has been no change in the Government's position.
When talking about restructuring—a word which is used rather vaguely—we are talking about aid for the modernisation of our fleet and not about payments to companies that will no longer be able to operate because of our exclusion from deep waters. That is no way to encourage the development of the British fishing industry. There may be a need for compensation to be paid to encourage people to leave the industry, but those who need to leave are those carrying out industrial fishing. I hope that the Minister of State will recognise that in the long term there is no place for the sort of industrial fishing that is carried out by the Danes. We want the money to be used in this country to encourage the development of our catching side and the important processing industry.
I am glad that the hon. Member for Aberdeenshire, East (Mr. McQuarrie) pointed out that we have to face up to the fact that there may not be a settlement. I reaffirm that having no settlement will be better than having a bad settlement. The Government have to face that issue. We ask for reassurance that the Government do not intend to continue on a piecemeal ad hoc basis with our industry moving into further decline while other members of the EEC prepare to take advantage of the fish in our waters.
I hope that the Minister will tell us that the Government will not allow the negotiations to drift for another three or six months—perhaps another year—while our industry continues to languish. The Government must show that they mean business. Fishing is an important industry. The position of the House is clear. I remind the Minister of State that he accepted the Opposition amendment last August reaffirming the commitment of the House of Commons to the major elements of a common fisheries policy, including a 12-mile exclusive limit and a dominant preference for 12 to 50 miles. All that we ask for is an assurance from the Government spokesman that the Government still stand by that commitment, a commitment of the House of Commons.

Mr. Buchanan-Smith: As the hon. Member for Edinburgh, East (Mr. Strang) said, we have had a useful debate, and I am grateful to all right hon. and hon. Members who have taken part.
In the short time at my disposal, I hope to deal with a number of the issues that were raised. I am disappointed, as I am sure is the hon. Member for Aberdeen, North (Mr. Hughes), because so few people, other than he, referred to the social measures, which I think are important. I was also disappointed at the grudging attitude of the hon. Member for Aberdeen, North. If we have already adopted measures which are in advance of or as good as what has been proposed by the Community, we should be proud of the fact. I smiled wryly when the hon. Gentleman, who is keen to attack the common fisheries policy on so many other issues, sought on this issue, in which I know that he

has a genuine interest, to duplicate what we are already doing. Nevertheless, I am glad that he welcomes some of the proposals in that connection.
The question of conservation measures was raised by a number of hon. Members. The hon. Member for Berwick-upon-Tweed (Mr. Beith) rightly asked about herring, which is of crucial importance both to his area and to other areas. I can assure him that the herring fishery will not be opened until it is scientifically justified. As he may know, the herring stock in the area off his part of the North Sea is showing the signs of slowest recovery. He asked when the herring fishing could be opened in that area. We do not want it to open, except on that advice.
The right hon. Member for Down, South (Mr. Powell) asked about article 7(2) of document 5360. He is right to say that that provision is linked to and dependent on the decision on the total allowable catch for the Mourne stock. However, a nil TAC is proposed for the Mourne stock. That is mentioned in document 5304. Both the conservation measure and the TAC are consistent. hope that the one reinforces the other. I hope that that explains the position.

Mr. J. Enoch Powell: Why, then, does the Minister in charge of fisheries in Northern Ireland inform me that the TAC for the Mourne stock has not been settled and that he expects that a catch will be allowable in 1981?

Mr. Buchanan-Smith: There has not yet been an agreement on the TAC. Certain overall proposals have been made, and some of those are in the documents before us. They are still open for discussion and conclusion. Until we reach that stage, it is not possible to say what will happen. There have recently been scientific meetings on herring generally, as a result of which certain recommendations are likely to be made.
I am glad that my hon. Friend the Member for Argyll (Mr. MacKay) raised the matter of salmon conservation. That is an important part of any agreement that we have with the Faroe Islands. Quite a lot has been achieved. For example, there is a Community ban on the catching of salmon in the high seas outside 12 miles. Some criticise the Community for achieving nothing in conservation, but in relation to one stock, in which my hon. Friend is interested, measures have been taken.
The Government's attitude towards access has not changed. I should like to refer to the headline in Fishing News which a number of hon. Members mentioned. It is completely inaccurate. At no time during the meeting, either in my speech or in answering questions afterwards, did I use the words in question, nor do they reflect anything that I said. I dislike having to say so, but I believe that that is an example of disreputable journalism—taking words that were not used and putting them in inverted commas in a headline of that nature. I have checked with others who were at the meeting, and what I have just said is based not only on my recollection but on the witness of other people who were there.
Such journalism does no service. I am prepared to take any criticism from any source as to my opinion, so long as it is reasonably and constructively couched. But to publish such headlines implies a weakening of the United Kingdom's position. I ask those who resort to such tactics to reflect that they give comfort only to those who do not wish to see a successful outcome for the United Kingdom.


Those who wish to see the United Kingdom weakening in negotiations are the only people who are helped by such headlines.
We certainly believe that it is necessary to negotiate an exclusive zone. What I said at Lowestoft and repeat tonight—I have said it in the House before—was that I thought that within an exclusive zone it might be necessary in some areas to consider those who had fished historically there. That is a matter on which no conclusion has been reached in the negotiations, in which it must be discussed.
The hon. Member for Edinburgh, East raised the question of areas of further preference. I believe that the principle of further preference can be met in relation to a fishing plan. What has been proposed for the North of Scotland is not adequate, in relation either to the area or to the control measures within it. We want to see an area not only off the North of Scotland but in the Irish Sea, and much more effective control measures.
A number of other general issues were raised. The hon. Member for Grimsby (Mr. Mitchell) made a number of points, without a great deal of accuracy—indeed, with more rhetoric than accuracy. Fishing was not, and never has been, part of the budget negotiations. My right hon. Friend the Prime Minister has made that absolutely clear on a number of occasions, and the fact that the budget agreement is in course of implementation demonstrates it. It is time that the hon. Gentleman got that idea out of his head. Before he starts spreading false accusations, I ask him to reflect on the part of his own Government in conservation matters. The Hague agreement was negotiated in 1976 under his Government, and it is that on which we are losing the court cases, on the conservation measures introduced by his right hon. Friend the Member for Deptford (Mr. Silkin).
It was by The Hague agreement of 1976 that the whole matter of the unilateral power in relation to conservation measures was given away. I suggest that if the hon. Gentleman feels so strongly about it he should ask his own Front Bench why they did not renegotiate the scheme at the time of the Dublin agreement.

It being half-past Eleven o'clock, Mr. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted business).

Question agreed to.

Resolved,
That this House takes note of European Community Documents Nos. 11626/80 and Corrigendum 1 on the social aspects of the Community sea fishing sector, 4884/81, 5361/81 on quotas, 5304/81, 5360/81, 5362/81, 6021/81 on total allowable catches and surveillance zones, and the Ministry of Agriculture, Fisheries and Food's unnumbered memoranda of 9th February 1981 on quotas, of 28th April 1981 on Swedish registered vessels fishing in the waters of member states of the European Community and of 11th May 1981 on Faroese fishing in the waters of member states of the European Community; endorses the view that social measures, particularly in relation to working conditions and remuneration, are best left to the discretion of national authorities, and supports the Government's aim of securing an early comprehensive settlement on a satisfactory revised common fisheries policy.

Orders of the Day — National Health Service (General Practice Loans)

The Under-Secretary of State for Health and Social Security (Sir George Young): I beg to move,
That the draft General Practice Finance Corporation (Increase of Borrowing Powers) Order 1981, which was laid before this House on 1 May, be approved.
I present this order in conjunction with my right hon. Friend the Secretary of State for Scotland in exercise of our powers under section 6(3) of the National Health Service Act 1966. My hon. Friend the Minister for Health was to have presented it but he is unwell. He is now, I hope, obeying the injunction to physicians in the New Testament and healing himself.
The need to bring the order before the House tonight arises from the continuing high level of demand from family doctors for loans from the General Practice Finance Corporation and from the backlog of applications that built up prior to the 1980 legislation because the corporation had committed the whole of the £25 million to which its borrowing had been limited some 12 months before it became possible to increase the limit to £40 million.
The corporation advised the Government earlier this year that it might be committed up to the present borrowing ceiling of £40 million by June, and it asked us to seek the approval of the House to increasing its borrowing limit by that date in order to prevent any holdup in its expanding business. We were pleased to accede to that request and to bring the draft order before the House.
The order raises the corporation's borrowing powers from £40 million to £75 million. This gives a good margin above the expected need, and I hope that it will be adequate for the next three years. I understand that at 30 April the corporation was committed to lending nearly £38 million. It would be wrong for the corporation to commit itself beyond its borrowing limit, so an increase in its borrowing powers is now urgent.
The new ceiling will enable the valuable work of the corporation in meeting the demands from doctors for loans to continue and will also enable it to make use of the powers it received, under the Health Services Act 1980, to buy surgery premises for leasing to general practitioners. These new powers are only just coming into use, and it is too early to say yet what the demand from general practitioners for this kind of arrangement will be, but it is clear that it will add to the corporation's borrowing requirements.
I should make clear to the House that the corporation is obliged by the terms of the 1966 Act to break even, taking one year with another, and that it is entirely independent of the Government as regards its operating costs, so it makes no demands on public expenditure.
The corporation is an independent body controlled by its members. It was set up in 1966 with all-party support, and it makes loans available to family doctors working in the National Health Service to provide and to improve surgery accommodation for their patients. The members include general practitioners and persons with appropriate legal, financial and estate management experience. Appointments are made by Ministers following consultation with representatives of the medical profession.
The corporation is responsible for its own financial policy and raises finance by issuing stock and by temporary borrowing, both of which are guaranteed by the Treasury under the terms of the 1966 Act. The stock is then taken up by the national debt commissioners and temporary borrowing takes the form of a bank overdraft, limited to £2½ million, which gives the corporation flexibility in choosing the best time for stock issue. The issue and redemption of stock and the limit of temporary borrowing are subject to the approval of the Secretaries of State and the Treasury.
Since its establishment, the corporation has made more than 3,000 loans to individual doctors, groups and partnerships, and there is no doubt that it has played an important role in stimulating the building of new and improved premises as well as assisting doctors in purchasing existing premises or a share in them. I take this opportunity to pay tribute to the chairman of the corporation, Mr. Stebbings, and the other members and the staff of his board for the valuable public service they have given in managing and developing the corporation's business.
If the House agrees to the order, I hope very much that the corporation will be able to continue to expand its work. There has been a welcome improvement in GP premises in recent years, but there is scope for more to be done, especially in some of our inner city areas, and we should very much like to see more applications from GPs in these areas. The new powers, which Parliament agreed last year, enabled the corporation to buy and lease premises to GPs, and I hope that they will have an important part to play here as it is often in the central areas of our great cities that some GPs find that the long-term capital commitment of providing premises is more than they want to take on.
The buy-and-lease arrangements should help here, while still leaving the GPs with a deciding role in the design and subsequent management of the premises, which is what they want even if they do not own them. In my view most GPs will, however, wish to go on owning their own premises, which they see as a key part of their independent status and essential to the well-being and vigour of the profession. We in the Government strongly support the profession on that. The order will in its way help to support and strengthen that concept, and I am happy to ask the House to approve it.

Mrs. Gwyneth Dunwoody: I suppose that I am the eternal optimist. I had hoped that the Minister would be prepared to expand rather more than he has on the whole question of general practice facilities. I hope that he will not mind my saying so, but on this occasion I am rather sad to see him here. I hope that he will convey my best wishes to his colleague. I am sorry that the Minister for Health is ill. It was he who today answered a written question on the Acheson report, which specifically deals with the facilities in general practice and has whole sections dealing with the provision of general practice facilities.
The provision of money is one of the most important elements in inner city health care. If there is a primary health care team that is easily accessible to patients and is efficiently organised and properly housed, it becomes the front line in the battle against disease. When we compare those countries where a general practitioner service is not readily available with our own NHS facilities, it becomes

obvious that the type of general practitioner service that we have is by far the best way to combat the problems. Therefore, the provision of finance for surgery premises is of paramount importance.
The Acheson report set out in great detail some of the problems of the inner cities. There are still far too many general practitioners working single-handed and operating from substandard premises. There are still far too many practices where the patient knows that a call to the doctor after hours will almost inevitably be answered by a deputising service and a doctor unknown to him. There are still far too many practices where the GP is not part of a proper health care team but still operates as he did 20 or 30 years ago, at the beginning of the NHS.
The corporation was brought into operation precisely to deal with the problems that were arising from the independent status of the general practitioner, because there was the odd situation that those doctors who provided a high level of service for their patients were being penalised by providing those services out of their own pockets, and the man who did not provide proper surgery care was getting paid the same sort of money. The corporation was set up specifically, as an autonomous body, to deal with some of the difficulties that were arising.
We have marched on energetically, but the provision of health care in the inner cities has not kept pace with other health developments. In the recent past there has been a great deal of pressure to improve and change hospital services, but the primary health care services have not had the same kind of support.
We do not lack evidence of the difficulties. One has only to read what is said in the Acheson report, not only about the premises, but about the difficulties that arise because of the possibly inadequate stock, to appreciate the situation. The report says:
Evidence submitted to us from many sources has referred time and again to the very poor quality of practice premises which may even be inadequate for the provision of general medical services … Comments have described lock-up shop front premises, poorly decorated with little or no sanitary facilities.
In London, unlike Manchester, there is no adequate system of inspection and, indeed, no financial incentive to the general practitioner to extend or to improve his premises.
The Minister said that he hopes that the new buy—and—lease facilities will change all that, but it is not that simple. If he thinks that it will be easy to deal with, I refer him to the Acheson report. That spells out the problems facing the general practitioner in the inner city. It says, in effect, that property is exceedingly expensive for him to buy. If he tries to lease a shop, it is not really in his interests to improve it to make it better for his patients because those improvements might make it a bad capital investment for the doctor. If he wishes to sell or dispose of the premises later, the improvements that are demanded by the constraints of his job stop him selling property for the best market price.
The report goes on to say:
The Health and Safety Executive will in the next few years be undertaking routine inspection of premises.
The report hopes that it will make clear the need for improvements with regard to basic inadequacies and hazards. However, it says:
We have no doubt that the evidence we have received regarding the unsatisfactory nature of many premises in inner London reflects a real problem".


It makes various recommendations.
What is the reality of health care at primary health care level? In far too many areas, especially in the inner cities, single-handed GPs without the back-up or proper teams are not providing the levels of care that are necessary. There are far too many elderly GPs operating limited lists. The report states that one of the real improvements that could be made to encourage general practitioners to retire would be to give them a positive incentive and to provide them with better facilities. There are far too many health care centres that are not properly supplied. Even those built by the National Health Service have a considerable number of design faults which the teams have criticised.
I must declare an interest and say that we believe it is important that we should move towards health care teams at primary level. The day is gone when the doctor can provide solely for the needs of his patients. It is important that doctors should operate, if not from health centres, from units which contain many back-up services. The centres should provide nurses and midwives, with many ancillary workers embodied in the team, including pharmacists.
It is clear that unless the Government do something positive the method we are considering is inadequate. There will not be enough general practitioners to take up the moneys available through the corporation. They will be faced with problems not only of committing themselves to a considerable sum for repayment, but of having to decide whether they have large enough premises and proper clerical space for the back-up staffs and whether they will be able to agree with the local authority on such elementary things as having enough car parking space around the centre.
The Government should now be doing something positive about these matters. They should not simply be saying "Here is the money. We have upped it to an amount that is slightly more than the inflation rate, but that is all we are talking about". They should be seeking positive incentives to improve health care in our inner cities by encouraging general practitioners to set up health care units.
I do not feel that we need say automatically that GPs must work from health centres, but if the situation in the inner cities is to be changed a number of radical decisions must be taken quickly.
We must build up the primary care health services. We must demand that everyone involved, at every level, including the family practitioner committees and the people who take decisions about the numbers of doctors who are allowed to practise, the size of the lists and the numbers of deputising services that are allowed, be taken into account.
In replying to a written question today about the publication of the Acheson report, the Minister for Health said:
This report not only points out the special problems in London but also shows ways to improve London's health services.
When talking about cutting down on acute hospital beds, he said:
the money saved can be used to build up primary care services.
He said that he was very grateful and that he intends to ask
all the responsible authorities to consider the report.
That is a totally inadequate response. We hear a great deal from the Government about their commitment to the

National Health Service, the way that they want to develop partnership with private health care, and the way that they are deeply concerned about the level of involvement between the community and medicine. But when it comes to the point, what do they have to say in response to a very positive report? They say:
The Department will be considering those recommendations for which it is responsible.
If the Department's response is about as active as some responses that we have had so far on other major reports, it will be worse than useless.
I ask the Minister to consider whether just increasing the amount of money available to the corporation is enough. Is he not prepared now to talk to the profession about the situation in the inner cities, the lack of proper provision, the number of inadequate practices, the number of elderly general practitioners, and the difficulties of getting people to provide proper health care when they themselves are not given the incentive even to improve their own practices?
I ask the Minister to address himself strongly to the evidence that has been given to him by Professor Acheson. What is asked for is very elementary. The report says that the Department should
set minimum standards for GP premises and ensure effective inspection.
That means giving them not just money to borrow from the corporation. It means giving money to provide an inspection service. It is done in other areas. It should be done in inner London.
The report says that we should
involve health and local authorities in providing or assisting in the provision of premises.
It spells out where the problems arise for local authorities, how local authorities fail to respond to the needs of particular areas, and how, in many instances, they have not even been asked to use the facilities that they have to improve health care in the inner cities.
The Government bear a great responsibility for the difficulties that have arisen in relation to, for example, joint financing. Since the Secretary of State for the Environment hacked the amount of money available to local authorities almost to nothing, it has been virtually impossible for the personal social services or those joint financing projects that are desperately needed by the community to be funded by local authorities. It is very important that the Government should be prepared to consider this sort of aspect.
The report asks for improved staffing levels and reduced case loads in the community nursing services. I believe that a primary multi-disciplinary health care team, working as equals, can operate effectively only if the premises in which it is working are of a very high standard. We cannot expect nursing staff to be able to see people, and, in many instances, to pass on their expertise in teaching, if they do not have room to deal with patients or to store their records, or even a place where they can easily meet the staff in the other disciplines. The recommendation in the Acheson report that we should improve the conditions of work for community nurses in terms of pay, accommodation, transport and social and recreational facilities should be an urgent priority.
One of the hazards of the independent status of the family practitioner is that if he chooses to develop his own premises by using the money that we are discussing he faces a difficulty with ancillary staff among many other difficulties. Many ancillaries are paid directly by area


health authorities and the calculation of their hours of work, the jobs that they are supposed to do and their job description are issues that are decided by the AHAs. There should be a positive way of encouraging co-operation at a much higher level between the general practitioner and the AHA to ensure that the team has proper back-up in terms of hours of work and the moneys that are available.
There are many other aspects of the report that I hope we shall have the opportunity fully to debate. The report was published only today, but its timing is impeccable. We do not need to ask ourselves about the problems in the inner cities. All of us who have seen the lock-up shops, who have tried to obtain general practice care and who are aware of the number of patients who are forced to dial for an ambulance to take them to an accident or emergency department to get care that should be provided by the general practitioner know that a great deal is wrong with the present system.
That will not be changed by saying to general practitioners "This money is available. If you wish you may borrow it. You may use some of our facilities in some instances to lease back premises that we have acquired." However, that is only scratching at the surface of the problem. If the Government are not prepared seriously to consider all the other implications of the provision of primary health care centres, they will be failing disastrously.
I had hoped that the Under-Secretary of State would say more than that the Government will be studying the report, that they have some money to spend and that it will be spent wisely. The Minister must know that the applications to the corporation over the past three years have been quite considerably down on some of the earlier applications, so it is not true to say that all is well with the corporation. It is doing a marvellous job. It is worthy of support. The money that the Government are giving it will cover only the backlog since the last amount was given to it some years ago.
The truth is that if we are to have proper health care in the inner cities, and if we are to retain the general practitioner services which everyone acknowledges must be the front line of our health care services, we must do a great deal more than the Government seem prepared to do. I hoped that the Minister would give us some hope that they are considering the subject seriously.

Sir George Young: When the hon. Member for Crewe (Mrs. Dunwoody) said that she hoped that it would be possible to have a wide-ranging debate on the future of primary health care and to consider at some length the recommendations of the Acheson and Harding reports, I found myself nodding in agreement. These are tremendously important issues. How we build on our good primary care services, how we capitalise on our GPs and whether we shift resources from other sectors of the Health Service to do so are fundamental issues that will have an effect on the future of the NHS. I hope that the hon. Lady will accept that a one-and-a-half-hour debate on an order increasing the sum that the GPFC can lend is not the right forum for such a wide-ranging debate. I hope that it will be possible at some stage to find time for it.
I think that the hon. Lady was rather impetuous in expecting the Government to come forward this evening with a response to a report that was published only this afternoon. The Acheson report, which I have read, is a

stimulating and radical document that has come up with new solutions to some of the old intractable problems affecting primary care services in the inner cities. I hope that we shall be able to make some progress in implementing them. I hope, however, that the hon. Lady will accept that other bodies with an interest in the matter should have the opportunity to make their views known before we take decisions.
The hon. Lady said that there were problems with the take-up of joint funding. I understand that the take-up over the country as a whole is nearly 100 per cent. If one or two local authorities find themselves unable to commit themselves to specific projects, there are provisions to switch the money to other areas in the region or, indeed, to other regions. The growth of joint funding, which is one of the real growth areas of the NHS, has been one of the success stories, and I hope very much that we can build on and develop it.
I agreed with the hon. Lady's analysis of the problems of primary care in our inner cities. These were described in some detail in the Acheson report. The report confirms that there are serious problems in primary care in London, some of them well known, and it makes many suggestions as to how they should be tackled. The report points out that the burdens on primary care services are bound to increase over the next few years as changes take place in hospital services in London. This was also recognised by LAG, the London Advisory Group, in its report on acute hospital services.
When we accepted the advisory group's report, one of our main aims was to see a shift in resources from hospital to community care. What is more, we said that a large proportion of the resources released from the acute services must be kept in London to strengthen other services, including primary care. That remains our objective and we have asked authorities to consider the Acheson report urgently to see what action they should take.
As the Acheson report points out, and as the hon. Lady said, primary care teamwork has not developed in London to the same extent as it has outside. The Harding report, which was also published today, emphasises that. That report dealt with the development of primary health care teams nationally and made a number of recommendations to encourage further development.
I think that the hon. Lady was a little unkind in implying that there had been no improvements. The number of GPs, for example, has risen from 25,614 on 1 October 1979 to 26,140 on 1 October 1980. The number of candidates for district nursing examinations shows a welcome increase from 1,875 in 1979 to 2,010 in 1980. The waiting list figures show a welcome reduction. I therefore do not accept the hon. Lady's criticism that no progress has been achieved by the Conservative Administration.
The Acheson report relates to the order before the House tonight. It identifies GPs who have been unwilling or unable to improve their premises or, indeed, to buy new premises. I think that the extra steps that we are taking today in this direction will enable some of those problems to be tackled. The corporation's financial capacity to help the GPs must be maintained and is an integral part of the improvement of primary care services.
I take it that the hon. Lady does not wish to resist the order. I ask the House to approve it.

Question put and agreed to.

Resolved,
That the draft General Practice Finance Corporation (Increase of Borrowing Powers) Order 1981, which was laid before this House on 1 May, be approved.

MATRIMONIAL HOMES (FAMILY PROTECTION) (SCOTLAND) BILL [LORDS]

Order for Second Reading read.

Motion made, and Question put forthwith pursuant to Standing Order No. 67 (Public Bills relating exclusively to Scotland),
That the Bill be committed to a Scottish Standing Committee.—[Mr. Goodlad]

Question agreed to.

STATUTORY INSTRUMENTS, &c.

Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, &amp;c.)

EMPLOYMENT

That the draft Employment Protection (Employment in Aided Schools) Order 1981, which was laid before this House on 15th April, be approved.—[Mr. Goodlad]

Question agreed to.

Rate Support Grant

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Goodlad.]

Dr. Edmund Marshall: I have sought this Adjournment debate because of the unsatisfactory nature of the replies given to me by the Secretary of State for the Environment at Question Time on Wednesday 6 May, as reported at column 147 of the Official Report.
The question that I then asked concerned the shift in rate support grant this year away from district councils in favour of county councils. In particular, I asked the Secretary of State what was his estimate of the percentage increase in total grant paid to county councils in England in 1981–82 compared with 1980–81.
I am afraid that the right hon. Gentleman did not attempt to give a direct answer to what was really a straightforward question from me. Instead, he gave me some different figures which arise from including within county incomes the amounts precepted by the counties on district councils. I was talking not about precept income but simply about the grants paid direct from the Government to the county councils.
The right hon. Gentleman also claimed that Humberside county council, which he chose to mention, was a grant loser between 1980–81 and 1981–82. But this claim must be based on some very abstruse arithmetic, as I shall show, and it is completely contradicted by figures which I had earlier received from the Minister for Local Government and Environmental Services.
My purpose in the debate is to set on record the true facts of the redistribution of rate support grant between last year and this year. I am pleased that the hon. Member for Pudsey (Mr. Shaw), the Under-Secretary of State for the Environment, whom I know to be a very fair-minded man and a fellow Yorkshireman, has come to the House to join me in clarifying these matters. I look to him to help me in my search for truth.
I mentioned a moment ago figures which I received from the Minister for Local Government and Environmental Services. Those figures were set out in tabular form accompanying a letter which I received from the Minister dated 27 January 1981. The letter came in response to an earlier parliamentary question, in which I had asked for information about what the new arrangements for rate support grant would mean in cash terms for every principal authority in England.
While in general I accept all the provisos and the caveats given in that letter from the Minister, the tables accompanying it contained all the information that I was then seeking—namely, the amounts of grant paid to individual local authorities in 1979–80 and the estimated amounts for 1980–81, all expressed in constant money terms at 1981–82 prices. Clearly, those figures will have been superseded by better estimates obtained from information that has become real fact since 27 January. I shall be delighted if the Under-Secretary of State is able to provide any updating of that information. In broad terms, however, the figures accompanying the letter of 27 January indicate quite clearly the general implications of the grant redistribution this year.
The main conclusion to be drawn from the figures given by the Minister is that the new grant arrangements involve


a considerable reduction in the total amount of grant paid to district councils and a somewhat smaller increase in the total amount paid to county councils.
In the last few days I have been doing some laborious arithmetic, using the figures given in the Minister's tables, and I find that, at constant 1981–82 prices, the total estimated grant paid to the 46 English county councils—that is, including the Greater London Council—in 1980–81 is £2,286,188,000. The corresponding figure for 1981–82 is £4,571,143,000. That represents an increase of 99·95 per cent., which is remarkedly near to a doubling of the grant paid by the Government to county councils.
Considering that that increase is based on constant prices, I can now see that the correct answer by the Secretary of State to my question should have been that his estimate was well in excess of 100 per cent. In simple terms, the total grant paid to the 46 English counties has been more than doubled between last year and this year. Now that the county council elections are over, perhaps Ministers will openly admit that that has been the main effect of the rate support grant reconstruction which has taken place this year.
I should like to quote the figures for Humberside as an example. That county was specifically mentioned by the Secretary of State in his oral answers. In the tables sent to me by the Minister for Local Government and Environmental Services on 27 January, the figures for Humberside showed estimated grants of £104,799,000 for 1980–81 and £163,380,000 for 1981–82—again, at constant 1981–82 prices.
No juggling of the arithmetic can possibly substantiate the Secretary of State's claim in his oral answer to me that Humberside "was a grant loser". The plain fact, based on the Minister's figures, is that at constant money values the grant increase for Humberside between last year and this year is £58,581,000.
Let us look at what that means in terms of rateable value. The total rateable value for the county of Humberside in 1980–81 was £94,263,000. That means that the increase in rate support grant paid to the county council for this year compared with last year is equivalent to a precept income of 62·15p in the pound. Yet the actual precept levied by the outgoing Tory county council in Humberside, which now no longer holds office, showed a decrease of only 6p in the pound. Even that small decrease was the subject of much boasting by Tory county councillors and even by the Secretary of State in his answers to me on 6 May.
For any saving to have been demonstrated by the county council between last year and this year, the precept which it levied this year should have been reduced by more than 62p in the pound to end up with a county precept of, at most, 39p in the pound. As things now stand, the total precept, plus rate support grant income to Humberside county council, shows an increase from last year to this year, not allowing for inflation, equivalent to 56p in the pound. On those figures, which are based on the information given to me by the Minister on 27 January, county councils throughout the country, such as Humberside, would seem to be well placed financially at present, although some have fared better than others and some have more urgent spending needs than others.
But the reverse of the picture is the position of the district councils and the London borough councils. Again, taking the figures given to me by the Minister in January,

the total estimated grants to be paid to all district councils and the London boroughs, including the payments for ILEA and the Metropolitan Police, show a change from £7,076,600,000 in 1980–81 to £4,443,301,000 in 1981–82, both figures at 1981–82 prices. That means a reduction of 37 per cent.
As a particular example of that effect on district councils, the figures that the Minister gave me for Doncaster metropolitan borough council—which covers a major part of my constituency—show a decrease in rate support grant from £77,355,000 in 1980–81 to £58,719,000 in 1981–82. Both these figures are at constant prices. That decrease of 24 per cent. for Doncaster is equivalent to a loss of rate income of 65·85p in the pound throughout the Doncaster borough.
At the same time, the increase in grant to South Yorkshire county council, which covers Doncaster, is equivalent to a precept increase of only 48·62p in the pound. If those two figures are put together, it means that all ratepayers in the Doncaster borough are, on the basis of the Minister's figures, worse off in real terms by 17·23p in the pound of rateable value as a result of the Government's changes in rate support grant.
Everything that I have said this evening is based on the figures that the Minister for Local Government and Environmental Services gave me in the tables that accompanied his letter of 27 January. Although I accept that those figures will need modification to bring them fully up to date, I cannot see how that modification could be so drastic as to alter my main points. Although I am ready to consider any additional information that the Under-Secretary can provide this evening or in writing to me, nothing can affect the clear conclusion that this year has seen a dramatic switch in Government financial help in favour of county councils and away from borough and district councils. In broad terms, last year the county councils received just under one-quarter of the total rate support grant. In 1981–82, county councils will receive just over half the total rate support grant. As the total grant has marginally decreased, that shows that a great increase in provision has gone into county treasuries.

The Under-Secretary of State for the Environment (Mr. Giles Shaw): It is a rash man who seeks to joust in statistics with the hon. and statistical Member for Goole (Dr. Marshall). He is well versed in that science, or art form. I begin to understand that the same set of statistics can be made by various experts to prove different parameters. If my remarks do not satisfy the hon. Gentleman, and knowing how carefully he has gone into this matter, I should be willing for him to discuss the matter officially with me. We could then try to speak the same language.
It is impossible to discuss the figures that my right hon. Friend the Minister for Local Government and Environmental Services sent to the hon. Gentleman on 27 January without bearing in mind my right hon. Friend's warning and ultimate paragraph. He wrote:
Because of the differences in the grant arrangements for the different years and the different status of the figures in the different years (outturn through to estimates) I do not think direct comparisons between the entitlements of individual authorities in the different areas would be very meaningful".
My right hon. Friend hoped that the hon. Gentleman would bear that caveat in mind. My task is to set that


within the context of the rate support grant system and to endeavour to explain the position of the shires and districts.
The object of rate support grant is to supplement authorities' own finances so that they can provide similar standards of service for a similar rate in the pound despite differences in need for the services that they provide and in the rateable resources that they can draw on. The new system introduced by last year's Local Government, Planning and Land Act established close links between spending, grant and rates. For the first time, as the House has come to recognise, it is possible to see the principles on which central Government have distributed grants. In that respect central Government will also be open to more searching scrutiny as to how grant has been distributed. We welcome this opportunity for informed debate.
The hon. Member is concerned about changes in the distribution of grant. Measuring such changes in the first year of a new system is inevitably a complicated business. Gains and losses must be calculated against a base position corresponding to grant entitlements in the previous year. In the first year of the new system we have had to construct that by recalculating the grant that authorities obtained in 1980–81 on a basis consistent with their estimated block grant entitlements for 1981–82.
There have been quite a lot of changes. There are three main reasons. First, there are changes that follow from the improved approach to estimating expenditure needs. They are especially pronounced in non-metropolitan districts and in London because of the lack of a proper arrangement for assessing needs in such areas under the old system. Secondly, there is, of course, an across-the-board loss arising from the cut in the grant percentage—that is roughly the equivalent of a 3p rate. Thirdly, there are losses for high-spending authorities because of the effects of the grant taper when the threshold is reached. But, with one small exception—which I shall come to later—there has been no shift of grant, real or apparent, between tiers in shire areas. There has been nothing to mislead the voters, and I hope that I can demonstrate that there has been no trickery.
I realise that rate support grant and the changes introduced this year are complicated and technical, but I shall try to be clear. I do not apologise for this complication because there is a trade-off between simplicity and fairness. Rough and ready systems inevitably produce anomalies. I believe that we have struck the right balance.
Last year, unhypothecated rate support grant—what a marvellous phrase for this time in the morning—consisted of three elements: the needs element, the resources element and the domestic element. This year, under the new grant system introduced by the Local Government, Planning and Land Act, which implements some of the recommendations of the Layfield report, it consists of two elements: block grant and domestic rate relief grant. Domestic rate relief grant directly replaces the domestic element and there has been no change in the way in which it is distributed. We are therefore concerned only with the differences between last year's needs and resources element and this year's block grant.
Let us look, therefore, at the shire counties, excluding the GLC, the London boroughs and the metropolitan counties. They, and especially Humberside, appear to

concern most the hon. Member. Last year in shire areas needs element was paid to both counties and districts. Counties received £2,313 million and districts £365 million. Resources element was paid only to the districts, and amounted to £1,574 million. If one adds up these figures, it appears on the face of it that the counties received £2,313 million, and the districts £1,939 million. But that is not the end of the story. I hope that this is not becoming too complicated. The counties naturally put their needs element towards the cost of providing their services, but then they have to raise the rest of their revenue by precepting on the rate income of their constituent districts.
This is the crux of the matter. The £1,574 million received by the districts as resources element counted as part of their rate income. This means that the counties obtained through the precept not only the greater part of the money raised by the districts from their ratepayers, but also the greater part of the grant paid to the districts as resources element. We have estimated as best we can the actual destination of grant when this transfer through the precept to the counties is taken into account. It is that, last year, shire counties received £3,678 million, or about 86·5 per cent. of the combined needs and resources element, and districts received £574 million or 13·49 per cent.
This year, the same counties—the shire counties—have claimed 86·98 per cent. of block grant and the districts 13·02 per cent., an average shift to the counties of 0·47 percentage points, which, as I suspect the hon. Gentleman agrees, is statistically of little significance. We should, therefore, be clear, if that is possible in this complicated jungle, that there has been no significant shift of grant between tiers. Nor—and this is the point which understandably appears to worry the hon. Member—has the change in the way grant is paid had any real effect on the figures shown on the rate demand notes received by ratepayers.
There is no plot to conceal overspending by counties. The point is that grant is now paid directly to both tiers, and that none of it any longer counts as rate income. In other words, although counties now have to raise less money through the precept, the income on which they can precept is proportionately smaller, and there is therefore no net effect in terms of the poundage charged to the ratepayer. That is the justification for my suggestion that there is no trickery and deception. It is a simple mathematical fact, if there is any such thing.
In metropolitan areas, the position is slightly more complicated. There has been a shift of 1·08 percentage points from districts to counties compared to the base position which I referred to earlier, and which was published in the rate support grant report last autumn. This reflects the only significant change in the proportions of grant paid in respect of county and district services in metropolitan areas. There was, however, an anomaly in the old system, which the committee of inquiry into local government finance, the Layfield committee, urged the Government to correct. This was the needs element paid in respect of county services, which, in metropolitan areas, was paid to the districts, but not as rate income. I see that the hon. Gentleman agrees with me.
The counties were therefore unable to precept on it, and the county precept was higher—and the district rate lower—than it should have been. The new system corrects this. We estimate that last year £284 million of the resources element—12·04 per cent. of the total


grant—was passed to the counties through the precept. In addition, we estimate that £23 million of the needs element paid to the districts was attributable to services provided by the counties. Although, therefore, there has been an apparent shift of grant of over seven percentage points, this does not mean that proportionately more grant has been paid in respect of county services, and there has, of course, been no net effect at ratepayer level.
I said earlier that there was one small exception to this general picture. It concerns the cost of rate collection. I have already reminded the House that counties do not collect their own rates, but that they are collected for them by their districts. In the past, they have nevertheless contributed to the administrative costs of collection in proportion to the size of their precept. These were, however, costs over which they, the counties, had no control, the administrative efficiency of the operation being entirely a matter for the district. We have therefore now made districts wholly responsible for meeting these costs. This is a simple matter of encouraging efficient management, and is to everyone's benefit. It has nevertheless had the effect of reducing the county precept and increasing the district rate. We estimate that it involves less than a 2p rate—a far cry from the larger figures the hon. Member quoted. Not only that, but many rate demands notes have clearly identified the amount and the reason for the change.
I accept and I have possibly even demonstrated that rate support grant is a difficult and technical subject and easy to misunderstand. But if there has been any trickery or any electioneering, it is surely more likely to have been entertained by Opposition Members. I take the figures quoted by the hon. Member on 6 May. The hon. Gentleman claimed that there had been a shift in grant in favour of county councils equivalent to county rates of 78p in the pound in Lancashire and Northumberland, and 80p in the pound in Cumbria.
I assume that those extraordinary figures have been arrived at by taking the difference in grants paid direct to those counties in 1980–81 and 1981–82, and dividing it by their rateable values. I hope that I have said enough to make it clear that that is highly misleading, for it does not take into account the grant that they were able to obtain by precepting on the resources element paid to the districts. There has, in fact, been a shift to the county of 2·2 percentage points in Cumbria, 0·82 percentage points in Lancashire and 0·26 percentage points in Northumberland. If we take the rateable value figures published in the current "Municipal Year Book", that amounts to a 4·9p rate in Cumbria, a 1·8p rate in Lancashire and a 0·5p rate in Northumberland.
Let me emphasise that even those small shifts are not the result of Government policy, but are an indirect consequence of spending decisions made by the authorities.
The hon. Gentleman rightly raised a point in connection with Humberside. After taking into account the precept made last year on the resources element paid to the district, this year Humberside county council received a smaller proportion of the rate support grant paid in the county, compared to the districts, than in 1980–81. I will write to the hon. Gentleman to give him the figures involved.
I hope that my explanation of the change in the way grant is paid has been relatively simple to follow. The change is complicated, but that is largely because the old system was a hodge-podge of ad hoc compromise and adaptation. The new system which has replaced it—where grant is separately assessed for each authority, and separately paid to it—is straightforward and clear and will, I hope, make it unnecessary for misunderstandings like this to occur in the future.
It is plain that hon. Members are concerned about local authority overspending, as well they might be. My right hon. Friend the Secretary of State has made it clear on many occasions that the Government are determined to see through the adjustments to our economy that industry's plight demands. We are determined to concentrate on the creation of wealth before we concentrate on spending it, and we are looking to local government to respond to the challenge that has been forced upon us.
Let me set in context what is being asked of local government. In the private sector the word austerity has some major meaning, and it is not just the private sector that is making changes at a much greater rate than those being asked of local government.
Since the election, staff numbers in the Department of the Environment have been reduced from 52.100 to 46,100—a fall of 11 per cent.—and almost none by compulsory redundancy. Over a slightly shorter time, Civil Service manpower has been reduced from 732,000 to 695,000. Over the lifetime of this Parliament we aim to reduce Civil Service manpower by 14 per cent.
Those figures put local government plans into context. After nearly three decades of unparalleled growth in real terms, our ability to live beyond our means has come to a halt. We shall not be deflected from our objective of switching the balance between current and capital spending in the public sector. The 5 per cent reduction in real terms in current expenditure we have asked for over the three years from 1978–79 to 1981–82 belongs in that context——

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question putl, pursuant to the Standing Order.

Adjourned at twenty-nine minutes past Twelve o'clock.